Johannesburg - Government consultants have been warned to deliver the goods or face being penalised.
This comes after the country’s municipalities spent nearly R700 million on consultancy fees, with no real improvement in their financial performance and audit outcomes.
Government consultants will also be vetted in future to prevent situations where they do not improve a municipality’s financial standing due to incompetency, despite the huge amounts they get paid.
Addressing Wednesday’s briefing on the auditor-general’s local government audit results, Co-operative Governance and Traditional Affairs (Cogta) Minister Pravin Gordhan said the use of consultants by municipalities would have to be watched more closely.
“Now you would expect that the so-called private sector people have the right skills that they will come in and do the right thing…
“Well, we find that municipalities spend close to R700m hiring private sector consultants in one form or another. That still results in some 80 percent of financial statements not being of the quality required by the auditor-general,” Gordhan said.
“The government will ask tough questions about why these consultants get paid…
“Why are they contributing to undermining municipal financial performance, as opposed to actually assisting municipalities in this regard?”
Gordhan said one of the things the National Treasury would look at together with Cogta is the centralisation of procurement of financial management consultants “so that there’s vetting”.
“We have to ensure that we have the right people with the right qualifications and competence. But if they also don’t perform on what they said they will perform, there’s some recourse to withholding fees and taking action against those consultants,” Gordhan said.
He said hopefully within the next year or so “we can change this to become more supportive of municipalities”.
Auditor-General Kimi Makwetu said it was not about “chasing consultants away”.
“This is a relationship that... needs to be project-managed carefully,” Makwetu said.
In many instances, the audit results are no different from those that municipalities had without the consultant.
“The question is, could you not have spent that amount of money on something else?”
Makwetu was concerned that of 261 municipalities and municipal entities audited, 82 percent were unable to produce financial statements free of misstatements.