Auditor-General Tsakani Maluleke’s reports on municipalities will remain under wraps

Auditor-General Tsakani Maluleke. Picture: Thobile Mathonsi/African News Agency (ANA)

Auditor-General Tsakani Maluleke. Picture: Thobile Mathonsi/African News Agency (ANA)

Published Jul 12, 2023


Pretoria - While the Auditor-General, Tsakani Maluleke, has painted a gloomy picture of municipalities around the country, her management reports regarding the state of the municipalities will remain under wraps.

This is according to the Gauteng High Court, Pretoria, which recently turned down an application by Sakeliga that the auditor-general (AG) had to make these reports public.

Judge Jan Swanepoel found that the management reports prepared by the AG are not ‘’reports’’ within the meaning of what is prescribed in the Constitution. The Judge said the AG was thus not under a Constitutional obligation to make the management reports public.

Sakeliga turned to the courts as it wanted the management reports regarding 154 problem municipalities to be made public for the first time.

The management reports differ from the summary audit reports that are published annually in that they contain detailed information about specific cases of corruption, misappropriation, management failures, tax abuse and other irregularities, as noted by the audit teams.

The Constitution provides that all the AG’s reports must be made public. However, the management reports of municipalities have never been made public.

Sakeliga said it believed that the non-disclosure has to do with the fact that the management reports contain damning information which, if made publicly available, will herald a new era for accountability of public officials, accountability for tax money and municipal litigation.

Judge Swanepoel commented that this application has its origin in the chaotic state in which much of our local government structures find themselves.

In the words of the AG herself, ‘’The lack of improvement in municipal structures is an indictment on the entire local government accountability ecosystem, which failed to act and arrest the decline that continued to be characterised by service delivery challenges in municipalities.’’

According to the AG, about 28% of municipalities are in such a dire financial position that there is significant doubt whether they will be able to continue operating in future.

The court was told that many of these municipalities are factually insolvent. About 10% of municipalities received “disclaimed” audit opinions, which means that they were unable to provide the AG with evidence for most of the disclosures in their audit reports.

The application outlined the financial mismanagement which has occurred in a significant number of municipalities, some of whom are at a point of total collapse.

“I dare say that dysfunction in local government has a particularly severe and direct impact on the public, and more specifically, on the poor who do not have resources to fend for themselves,” Judge Swanepoel said.

He added that the importance of a properly functioning local government cannot be over-emphasized. “It is, therefore, laudable that Sakeliga has taken it upon itself to attempt to get to the bottom of the dysfunction in local government structures,” he commented.

Sakeliga wanted an order that the AG's failure to make all of her reports public, including the management reports, is unlawful and inconsistent with the Constitution. Sakeliga also wanted an order that all of the AG's reports, including management reports, must in future be made public.

The judge said the central question is what is the AG's constitutional obligation in respect of the publication of reports. The answer, he said, lied in the Constitution, which stated that AG is obliged to make audit reports public.

In contrast, a management report is a communication tool between the AG's office and a particular municipality. Once the AG has completed a preliminary investigation of the affairs of the municipality, it communicates its initial findings to the municipality.

Those findings, and the responses by the municipality, are then contained in a draft management report, which is provided to the municipality, the judge said.

According to the AG, audit reports and management reports have different purposes. An audit report is intended to fulfil the Constitutional imperatives, while a management report does not have that function.

“I accept the AG's version regarding the difference in between management and audit reports in both content and purpose. Consequently, I find that the management reports prepared by the AG are not ‘’reports’’ within the meaning of section 188 of the Constitution.”

Judge Swanepoel said it followed then that the AG was not under a Constitutional obligation to make the management reports public, the judge added.

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