North West’s damn­ing au­dit paints a pic­ture of an un­stop­pable slide

Mail & Guardian - - News -

The state of North West prov­ince’s pub­lic fi­nances is on a “down­ward spi­ral”, and its gov­ern­ment has shown a lack of ac­count­abil­ity and commitment to clean ad­min­is­tra­tion.

This is the sum­mary given in the au­di­tor gen­eral’s lat­est re­port on the na­tional and provin­cial au­dit out­comes for 2016-2017, which de­tails sys­temic non­com­pli­ance, waste­ful ex­pen­di­ture, a col­lapse in gov­er­nance and se­ri­ous weak­nesses in leadership in the prov­ince.

The North West provin­cial gov­ern­ment’s au­dit out­comes have re­gressed over the past four years. Only 32% of the de­part­ments and pub­lic en­ti­ties au­dited ob­tained fi­nan­cially clean au­dits in 2016-2017 com­pared with 46% in 2015-2016 and 62% in 2014-15 and 2013-2014. No pub­lic en­tity achieved a fi­nan­cially clean opin­ion in 2016-2017.

The re­port states that the of­fice of Premier Supra Mahumapelo, as a key mon­i­tor­ing and over­sight de­part­ment, was an area of “spe­cific con­cern” because it had main­tained a qual­i­fied au­dit out­come for the past two years with in­creas­ing ir­reg­u­lar ex­pen­di­ture.

In­stead of work­ing to ad­dress the weak con­trol en­vi­ron­ment at the de­part­ments that were au­dited, the provin­cial leadership’s re­sponse was to “con­test the au­dit con­clu­sions”.

Most (91%) au­dited de­part­ments and en­ti­ties had find­ings against them re­lat­ing to ir­reg­u­lar ex­pen­di­ture and non­ad­her­ence to pro­cure­ment and con­tract management pre­scripts. This re­sulted in ir­reg­u­lar ex­pen­di­ture ris­ing from R3-bil­lion in 2015 to R3.6-bil­lion in 2016.

“As a re­sult of this year-on-year in­crease and due to ir­reg­u­lar ex­pen­di­ture not be­ing in­ves­ti­gated, the to­tal un­re­solved bal­ance for the prov­ince was R16.5-bil­lion,” said the re­port.

Three de­part­ments were to blame for close to 60% of the ir­reg­u­lar ex­pen­di­ture, with com­mu­nity safety and trans­port management ac­count­ing for R880-mil­lion. Health’s por­tion amounted to R714-mil­lion, and pub­lic works and roads had a share of R550-mil­lion.

In 2016, the prov­ince re­ceived R7.1-mil­lion of conditional grant fund­ing for 16 projects. Although 95% of the al­lo­ca­tion was spent dur­ing the year, the au­di­tor gen­eral said it iden­ti­fied in­stances where “tar­gets of key projects were not achieved or where work was not com­pleted at the de­sired qual­ity”.

An ex­am­ple of this is a lo­cal gov­ern­ment and hu­man set­tle­ments hous­ing project that was de­layed for more than 20 months, in­cur­ring fruit­less and waste­ful ex­pen­di­ture. Poor project management and mon­i­tor­ing re­sulted in 503 hous­ing units be­ing de­mol­ished and re­built because of qual­ity de­fects, even though the con­trac­tor had been paid in full.

The re­port says in­ter­ven­tions did not have much ef­fect on curb­ing the lack of ac­count­abil­ity and con­se­quence management. Its down­ward slide was in­evitable “un­til such time as the pil­lars of ac­count­abil­ity and good gov­er­nance are put in place”.

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