Only one municipality out of 39 receives clean audit
Senqu Local Municipality was the only one out of the Eastern Cape s 39 municipalities to receive’a clean audit outcome from the auditor-general during the 2018/2019 financial year.
This was according to cooperative governance and traditional affairs MEC Xolile Nqatha, who spoke on the audit report while delivering his department’s policy speech earlier this week.
Nqatha revealed there were two municipalities in the province that were under Section 139 administration and 14 municipalities that were financially distressed.
“In terms of the municipal audit report for the 2018/2019 financial year released by the auditor-general [AG], out of 39 municipalities, only Senqu Local Municipality [based in Lady Grey] has received a clean audit outcome.
“Fifteen municipalities received unqualified audit opinions with findings, 14 municipalities were qualified, eight municipalities received disclaimers and one municipality has prejudice (disputing the audit outcome),” he said.
Reasons cited by AG Kimi Makwetu were non-compliance with legislation, weak governance, ineffective internal controls and flouting supply chain management processes.
Nelson Mandela Bay earned its eighth consecutive qualified audit opinion.
Nqatha said the challenges experienced by municipalities had a direct impact on service delivery, hence the increase in service delivery protests, and “unfortunately they have now become a destruction factor in our communities”.
“For example, in our province, poverty, unemployment and inequality remain our constant challenges that we must deal with aggressively.
“While in the same breath we observe political instability in local government sphere.
“Both these factors have a direct impact in the local government environmental narrative,” he said.
In working towards strengthening governance, Nqatha said to enhance efficiencies of basic infrastructure delivery, Cogta had introduced the provincial municipal infrastructure co-ordination guidelines.
The system would also help the department to support and monitor municipal infrastructure grant projects such as water , sanitation, roads, community halls, sport fields, land-fill sites and street lights.
“The goal is to detect early poor performance of infrastructure projects and service delivery backlogs. “The province is allocated R3bn for 2020/2021 financial year for infrastructure grant projects and 36 municipalities will benefit from this allocation,” he said.
Nqatha said irregular expenditure in municipalities was increasing at an alarming rate.
The Bay has a R16.5bn irregular expenditure bill dating back to 2002 which was also cited in the auditor-general’s opinion.
He committed that Cogta would support the municipal public accounts committees (Mpacs) to investigate compliance with the Municipal Finance Management Act (MFMA) and implement consequence management thereof.
“The department will continue to assist municipalities in collecting revenue from government entities.”
Nqatha also highlighted challenges experienced by amalgamated municipalities.
He said he had engaged Cogta minister Nkosazana Dlamini-Zuma and requested financial assistance for those affected to enhance their viability. One of those is the Dr Beyers Naude municipality that owes Eskom millions and has been constantly threatened with power cuts by the power utility.
Dr Beyers Naude mayor Deon de Vos had previously blamed debt incurred by its smaller amalgamated municipalities.
Meanwhile, DA MPL Retief Odendaal has written to finance MEC Mlungisi Mvoko on the issue of integrated development plan public participation meetings.
Odendaal said it had come to his attention that a number of municipalities in the province assumed the exemption notice issued by finance minister Tito Mboweni in terms of Section 177(1)(b) of the MFMA exempted municipalities from the public participation process to draft the IDP and 2020/2021 budgets.
“[This] should naturally be a huge cause for concern as any draft IDP or draft budget that will be adopted by a municipal council without having first been subjected to a public participation process, would be unlawful.
“I trust that you and your officials will ensure that our municipalities are well aware of the prescriptive requirements in respect of public participation processes, even amidst the Covid-19 pandemic,” he said.
He accused some municipalities of proposing tariff increases that were above the consumer price index, saying consumers were already under financial strain.