Irregular expenditure at Northern Cape municipalities increases to R390m
THE ANNUAL irregular expenditure of municipalities in the Northern Cape increased from R350 million to R390 million, with 96% of municipalities failing to comply with legislation.
This is according to Charles Baloyi from the Office of the Auditor-General in the Northern Cape, who presented the audit outcomes of municipalities in the province for the 2018/19 financial year on Wednesday.
According to Baloyi, the lapse in oversight and lack of controls relating to compliance were evident in a number of areas, including supply chain management.
Baloyi expressed concern that only one municipality was fully complying with supply chain management legislation.
“This is in spite of all the reporting we have done in this area, the red flags we have raised, and the many recommendations we have made. Uncompetitive and unfair procurement processes were common,” explained Baloyi.
Irregular expenditure increased to R390m from the R350m reported last year.
This included R295m which represented non-compliance in 2018/19, while R65m represented expenditure on ongoing multi-year contracts.
The top three contributors to annual irregular expenditure over three years was Hantam Municipality (R69m in 2018/19), Gamagara (R35m in 2018/19) and Emthanjeni (R27m in 2018/19).
Municipalities have a poor track record of dealing with irregular expenditure and ensuring accountability, said Baloyi.
A total of 96% of local municipalities did not comply with supply chain management legislation. This included uncompetitive and unfair procurement processes at 83% of local municipalities. Prohibited awards to other state officials involved at total of R26m while 28 suppliers provided false declarations.
Among the findings of the Office of the Auditor-General was that three written quotes were not invited by 75% of municipalities, while three-quarters of municipalities also awarded contracts to providers who were in the service of other state institutions. More than half of the municipalities did not get declarations of interest from suppliers while the performance of contractors were not monitored on a monthly basis.