CAPE TOWN - Irregular and wasteful expenditure has continued to increase in South Africa’s municipalities.
On Wednesday Auditor-General Kimi Makwetu released the audit outcomes for SA’s municipalities for the 2016/17 financial year in Parliament.
The results are shocking and illustrate irregular and unnecessary spending.
Last year municipalities spent R16 billion on irregular expenditure, this was a 50% increase from the previous year. Results show that this year municipalities further increased that percentage to 75%, spending R28.4 billion in unnecessary expenditure.
The AG audited 257 municipalities and 21 municipal entities, according to the department.
Makwetu noted his disappointment and acknowledge that there has been little to no compliance with his constant advice on administrative lapses and failures.
When looking at the last five years, the AG said during the briefing, that little change has occurred in these municipalities and there are still issues with accountability and good governance
“When we released the 2011/12 municipal audit outcomes in August 2013, we highlighted amongst others, a lack of decisive leadership to address the lack of accountability by ensuring consequences against those who flouted basic processes that hampered effective municipal governance.”
“We reported weaknesses in internal control risks that needed attention in local government by providing root causes for audit findings and recommendations to remedy underlying causes,” he noted.
“There has been no significant positive change toward credible results; instead we are witnessing a reversal in audit outcomes.”
Makwetu said that of the 257 municipalities audited only 16 improved, 45 regressed and sadly only 33 received clean audits. The financial health of municipalities is also at risk, according to Makwetu. This is mainly due to their inability to gather revenue from its consumers.
Makwetu said that 31% of municipalities acknowledged a deficit, that comes to a massive R5,6 billion. It should be noted that according to National Treasury 128 municipalities are in financial turmoil.
In November last year, the AG said that in the wake of significantly bloated irregular expenditure in the government departments and SOEs, he hopes his office’s power will soon be bolstered, enabling him to tackle reckless and irregular spenders of public funds.
“We have put in place a mechanism to deal with this matter through our Standing Committee on the AG in Parliament to ask them to assist us in getting our powers reviewed," Makwetu said in Pretoria while releasing the 2016-17 consolidated general report on national and provincial audit outcomes.
"When we look at a four year trend of irregular expenditure, we can be able to say this is not going to become a multi-year issue, what we are looking for in terms of these powers is a situation where Parliament allows us to pick up these items especially irregular expenditure and refer them to appropriate investigative agencies, to get to the bottom of what is behind this type of irregular expenditure,” Makwetu said.
We feel that short of leaving these things the way they are, they fester into the environment and they become big numbers over a number of years. Whereas we can make an intervention as an audit office, to say, we have identified sufficient audit evidence through the audit to warrant the need for these areas of irregular expenditure to be investigated so that the appropriate consequences can be attached to it. That process is still underway and we are hoping that by end of this month, our Committee would have finalised the proposed amendment to the Public Audit Act, giving us a much stronger tool.”