Municipalities run by unqualified officials

THE majority of Eastern Cape municipalities are run by accounting officers who do not meet the state’s minimum requirements.

Auditor-general Kimi Makwetu said this when releasing municipalities’ combined audit results.

These include Mnquma, Mhlontlo, Mbhashe, OR Tambo and Alfred Nzo.

In his report, Makwetu revealed 13 municipal managers, 17 supply chain managers and 17 chief financial officers in the province did not meet minimum competency levels issued by the national Treasury on June 15 2007. “While 55% of the chief financial officers had achieved the minimum competencies, 84% of the auditees [those who are audited] still made use of consultants.

“This indicates municipalities did not take ownership of the preparation of financial statements, or that they still lacked the skills required to apply the reporting framework properly and to prepare financial statements that complied with this framework.”

Makwetu said auditees continued to engage consultants to assist them with financial reporting and the preparation of performance information.

Municipalities spent a combined R69.8-million during the 2012-13 financial year and R58.4-million during the 2011-12 year.

This excludes amounts spent by the national Treasury, the provincial Treasury and the provincial De- partment of Cooperative Governance and Traditional Affairs on interventions to assist municipalities with financial and performance reporting.

The cost of consultants assisting with performance reporting was R7.7-million for the year under review.

Makwetu said audit outcomes of the 29 municipalities (84%) assisted by consultants with financial reporting and the 11 municipalities (26%) assisted by consultants with performance reporting achieved either qualified, adverse or disclaimed opinions.

“Even though municipalities use consultants to assist in improving the audit outcomes, factors such as poor control environment and the poor quality of the information provided to the consultants can have a negative impact on the work they perform.”

Makwetu also said municipalities had awarded tenders worth R109-million to councillors, employees, civil servants and family.

“We could not audit awards with a value of R1.183-billion at 15 municipalities as they could not provide us with evidence that awards had been made in accordance with the requirements of supply chain management legislation.

“There were 109 instances of awards with an overall value of R7.2-million to suppliers in which employees and councillors of the auditees had an interest.

“The persons involved included councillors, accounting officers, senior management and other employees,” Makwetu said.

There were 71 instances of awards with an overall value of R10.3-million to suppliers in which close family members of employees and councillors of the municipalities had an interest.

Makwetu said there were 497 instances of awards with an overall value of R92-million to suppliers in which other state officials had an interest.