“We have been looted since the days of Bophuthatswana. Every five years a new mafia comes to loot us; we suffer due to incompetence, corruption and politics – it’s bad,” says a colleague about her lived experience in the Mahekeng Municipality in the North West.
The Free State and North West share the spoils of failing to produce a single clean audit in the 2020-’21 auditor general (AG) report.
For the sake of good governance, municipalities are audited annually by the AG’s office. At the completion of such an audit, opinion is expressed.
An unqualified opinion with no findings (clean audit) means the municipality has produced quality financial statements free from material misstatements and has produced quality performance reports that measure and report on performance in a manner that is useful and reliable and complied with key legislation. Only 16% achieved this.
An unqualified opinion with findings means the municipality was able to produce quality financial statements, but struggled to produce quality performance reports or to comply with all key legislation. Only 40% achieved this.
A qualified opinion with findings means the municipality’s financial statements contained material misstatements that were not corrected before the financial statements were published. The municipality’s performance report or compliance with key legislation is also not adhered to. This is true for 30% of municipalities.
Financial statements with an adverse opinion with findings mean the AG disagreed with virtually all the amounts and disclosures in the financial statements. This is true for 2%.
A disclaimed opinion with findings means the municipality could not provide evidence for most of the amounts and disclosures in the financial statements, resulting in the AG being unable to conclude or express an opinion on the credibility of the financial statements. This is true for 10%.
And 4% simply did not bother to submit documentation for scrutiny.
The March 2022 Municipal Skills and Capacity Assessment Study is another report confirming that our problems in local government stem from a number of known problems. It points to people and behaviour. But it is the brazen use of consultants that is an indictment of our failing skills development initiatives.
A staggering R1,26 billion was spent on consultants in one year. And only 7% of municipalities used consultants to bridge a vacancy gap, whereas 62% appointed consultants to provide for the skills deficit in finance departments.
The inability of municipalities to master credible financial reporting means that they continue to appoint consultants, without the vital element of skills transfer. In total, 79% of municipalities reappointed consultants used in the previous year. So, instead of using the enabling Skills Development legislation, managers simply take the easy route and employ consultants.
Despite the mandatory and discretionary grant system from the Sector Education and Training Authority (Seta), a ministry dedicated to local government and the South African Local Government Association programmes, municipalities continue to decline at a rapid pace.
) Dr Harlan Cloete is of the Department of Public Administration and Management at the University of the Free State (UFS).
