Perform or there’ll be a price to pay

GOVERNMENT consultants have been warned to deliver the goods or face being penalised.

This follows Auditor-General Kimi Makwetu’s finding that the municipalities spent close to R700 million on consultancy fees without improving their financial performance and audit outcomes.

Consultants are to face being vetted to prevent this.

Briefing the media on the results yesterday, Makwetu said it had been found that 261, or 82 percent, of municipalities were unable to produce financial statements free of misstatements for the year ending June 30, 2013.

The audits had also noted R21.61 billion in unauthorised, irregular, fruitless and wasteful expenditure among the municipalities and their entities. In many cases, the audit results were no different from those achieved by municipalities that did not use consultants, Makwetu said.

Speaking at the briefing, Minister of Co-operative Governance and Traditional Affairs Pravin Gordhan said the use of consultants by municipalities would have to be watched more closely.

“You would expect that the so-called private sector people have the right skills, that they will come in and do the right thing.”

The government would ask “tough questions” about consultants.

“What are they doing? Why are they contributing to undermining municipal financial performance as opposed to assisting municipalities?”

Among other steps, his department and the National Treasury would look at centralising the procurement of financial management consultants “so there’s vetting that takes place”, Gordhan said.

“(This would be to ensure) we have the right people with the right kind of qualifications and competence. But if they don’t perform… there (would be) recourse to withholding fees (and) taking action against those consultants.”

It was hoped that, in the next year, “we can change this terrain in a way which becomes more supportive of municipalities”.

Makwetu said the point was not about “chasing consultants away”. “However, this is a relationship that is at arm’s length with the municipality and which needs to be project-managed carefully.

“If it is project-managed carefully, (with) clear milestones for what it is that has to be delivered for the funds disbursed… I think it will be the beginning of a right direction.”

There was R9.195bn in unauthorised expenditure, slightly less than the previous year’s R10.11bn. There was R11.6bn in irregular spending, up from the previous year’s R9.232bn.

This included R8bn spent on goods and services without going through proper procurement processes and R3.6bn for which there was no supporting documentation.

There was R815 million in fruitless and wasteful expenditure, compared with R623m the year before.