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Durban - Auditor-general Terence Nombembe has given bouquets to Durban Marine Theme Park (uShaka) and the International Convention Centre, but issued another indictment on South African municipalities.
He called for action against political leaders and municipal officials who deliberately or negligently ignored their duties and disobeyed the law.
They should be “decisively dealt with through performance management and by enforcing the legislated consequences for transgressions”, he said.
At more than 70 percent of those audited, the lack of consequences for poor performance and transgressions slowed down improvement in local government audit outcomes.
To help them deal with transgressions, his office has compiled a booklet on the legislation to be used in dealing with wrongdoers.
Engagement with municipal officials had been intense “but the response hasn’t been good. I am concerned that something that is so basic - so evident and simple - is taking too long (to address)”, the auditor-general said.
“One of the reasons is that there is no political will to make these things (skills development and penalties against transgression) mandatory.
“Disciplinary action (against wayward officials) hasn’t been forthcoming,” Nombembe said.
Deputy Minister of Co-operative Governance and Traditional Affairs, Andries Nel, was visibly embarrassed by the AG’s overall report, which he described as “thorough and meticulous”.
“I think the picture the report paints is one that cries out for intervention at local, provincial and national levels. It doesn’t make for pleasant reading,” he said.
Nombembe said there was also a critical need to strengthen the municipal public accounts committees and support the important role they played. This would further bolster oversight.
The progress towards clean audits had been slow. They had remained at the same low level of 5 percent (17 out of 278 municipalities) for three years.
Overall, however, the situation had deteriorated last year: 41 of the 338 municipalities and municipal entities had improved, but 50 had gone backwards.
All of the country’s metros, including eThekwini, received qualified audits.
Chief among the root causes of the poor audit results, was lack of capacity. At 73 percent of those audited, key vacancies and key officials without the necessary competence and skills made credible financial statements and performance reports difficult.
To fill this gap, 71 percent of those audited used consultants to help with financial reporting.
In KwaZulu-Natal, uMtshezi Local Municipality retained its clean audit, with uShaka and the ICC joining it. New auditees with clean books were: Safety City Pietermaritzburg, uThungulu Financing Partnership and uThungulu House Development Trust.
Five auditees in the province improved, but 15 regressed.
The winning formula of those with clean audits, Nombembe said, was that their leadership led by example and made concerted efforts to resolve audit matters raised in their previous year’s audit reports.
“Their results are a testimony that where political and administrative leadership set the right tone and work together to implement and constantly monitor basic internal controls, good governance is achievable.”
Speaker of the eThekwini Council, Logie Naidoo, said he was proud of uShaka and the ICC, which he said would in the near future become cash cows for the city.
Naidoo said both had brought the city a lot of tourists.
“In fact they are one of the city’s big attractions. When the loans are paid off, they will both bring the city a lot of money,” he said.
The Minority Front’s Patrick Pillay said the news of an improved audit report for the two entities was “fantastic” progress.
Pillay said the good report was a result of strict control measures undertaken by the city manager.
eThekwini city manager, S’bu Sithole, said the city was very close to a clean audit and was in line with the national plan to achieve this goal next year.
“Obviously we have some issues in terms of the city’s status but it’s important to note that the city has progressed very well.”
Sithole said Philip Ntsimane, the chief audit executive within the municipality, had been hired as of February and was “extremely capable”.
He said an appointment had also been made in the IT department to investigate issues of corruption and maladministration.
“Within IT there are issues. We need somebody competent and we didn’t have that. There are a lot of systems and we need to ensure they are secure.”
He said at a leadership level, he and mayor, James Nxumalo, needed to set the tone.
“We won’t tolerate acts of maladministration. The issues from Manase are actually positive for us because they helped us review our systems and practices.”
Clean books, compliance and effective, feasible service delivery were specified by Sithole as the answer to a well-run municipality.
“What we have done as a city at the ICC and uShaka must be developed. There are pockets of excellence and we must capitalise. We mustn’t be complacent but build on what we’re doing here.”
Lennox Mabaso, spokesman for KZN’s Co-operative Governance MEC, said it was important to put the audit in context: “The city got a qualified audit which means it is a clean audit, but there are minor matters.
“The MEC met the municipalities and a qualified audit is an improvement. The auditor-general is 98 percent satisfied, there are just a few matters that need to be attended to.” He commended eThekwini Municipality for bringing plans to the MEC which would address the concerns raised.
“It is a work in progress. Every day since December the municipality has been working on those things and this must be celebrated as it’s a step in the right direction.”
Mayor Nxumalo, said he was happy the city had received a qualified audit although irregular expenditure as well as water loss and illegal electrical connections needed focus.
“We are dealing with these matters and I think eThekwini stands a very good chance of a clean audit in 2014, the national target.”
He said the city had done well in reducing the irregular expenditure from R1.3 billion to R276 million in the last financial year, but the target was to get this number to zero.
“No department will force us to have irregular expenditure.”
He said eThekwini had 36 percent water loss, above the national average of 15 percent. Electrical theft, particularly in informal settlements, was also costing the city.
On water, Nxumalo said the construction of the Western and Northern aqueducts, to replace infrastructure which was more than 20 years old, would reduce loss.
He congratulated those running the ICC and uShaka, saying they did Durban proud.