Auditor-General worried after municipalities spent R1 billion on consultants
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Auditor-General Tsakani Maluleke has raised concern about R1 billion spent by municipalities to hire consultants despite having people in the finance divisions doing the same job.
Maluleke said on top of R1bn paid to consultants to audit their books, municipalities had staff in finance departments who are paid R4.5bn.
The two costs amounted to R5.5bn and there was nothing to show for it.
Maluleke said some of the municipalities which spent money on consultants were among the worst performing municipalities.
She said they had been talking about the issue of consultants for many years now.
Maluleke said R1bn was spent on consultants in some of the municipalities whose finances were not in order.
“We have seen that we spend R4.5bn on salaries on people employed in the running of finances of local government,” said Maluleke.
Consultants were hired to do basic things in municipalities. “Worryingly the municipalities that use the consultants the most - and they pay them most of the money - are those that end up with adverse or disclaimer audit opinions,” said Maluleke.
She said a disclaimer audit opinion is issued by auditors to financial statements when they could not obtain sufficient and appropriate financial statements to draw the conclusion or support their opinion.
One of the problems was the lack of paper trail in municipalities. They were also concerned about irregular expenditure which continued to be a problem in municipalities in the country, she said.
This year irregular expenditure was R26bn. However, they were continuing with efforts to get the documents from municipalities to see how money was spent, she said.