Teboho Setena
The South African Local Government Association (Salga) has reiterated its concern that a mere 45% of municipalities received a clean audit outcomes.
This is on the sideline of the Auditor-General’s (AG) 2023-’24 Municipal Audit Outcomes report which the Auditor-General of South Africa (AGSA) released recently.
This translates to 41 municipalities with clean audits, from 34 in 2022-’23 and 2023-’24. The other municipalities which did not achieve or improve are being flagged as being chronic due to irregular, unauthorised, and wasteful expenditure. All 24 municipalities in the Free State which include district, local and the only metro being the Mangaung Metro, are draped in the culture of wasteful and unaccounted expenditure of funds.
Municipalities that have consistently maintained clean audits since 2016-’17 are mostly governed by the opposition party, the DA.
These include the Midvaal Local Municipality in the Gauteng while the rest are in the Western Cape. These are the Cape Winelands District Municipality, Overstrand Local Municipality, Witzenberg Local Municipality, and the Cape Agulhas Local Municipality.
Salga stated that well performing municipalities are responsible for managing over R378 billion, or 66% of the total local government budget of R575 billion.
“This is an indication that most public funds are being managed with a degree of accountability. These municipalities should be studied and benchmarked for the replication of their governance models across the country. This is commendable and reflects the commitment of municipal leadership and officials to uphold financial discipline, internal controls, and consequence management. This improvement must be sustained and scaled across all municipalities.”
The municipality watchdog stated that improvements reflect stability in the audit outcomes, with 140 municipalities (55%) achieving unqualified and clean audit outcomes.
“However, Salga remains deeply concerned that 45% of municipalities received audit outcomes that fall below the standard of unqualified audits. This ongoing underperformance signifies the need for urgent reform, improved accountability, and consistent consequence management. The non-submission of financial statements and the recurrence of fruitless and wasteful expenditure must be decisively addressed.”
Salga stated that as part of its ongoing support, it will intensify its efforts to build leadership, governance, financial management, and institutional capacity in municipalities through its progammes.
The DA in the Free State announced it will request Dr Zwelini Lawrence Mkhize, the current chairperson of the Portfolio Committee on Cooperative Governance and Traditional Affairs (Cogta), to summon all the municipalities that did not submit their financial statements on time to the AG to come.
“They must report as to why they have failed to do so. The DA is not surprised by the AG’s remarks in the Municipal Fincance Management Act (MFMA) 2023-’24 report, made to the National Council of Provinces (Ncop).
Tsakani Maluleke, the AG of South Africa, said that five out of seven municipalities that fail to submit regular financial statements are from the Free State. They are Mafube, Kopanong, Mohokare, Masilonyana, and Maluti-A-Phofung. The report stated that the Free State is one of three provinces with the most prevalent poor-quality performance reports and municipalities with the most unfunded budgets.
“The AG said that action should be taken at the provincial executive and legislative levels to address the negligence of some municipalities in submitting financial statements on time. The DA is concerned, however, that the ANC-controlled executive and legislature will fail to take action to cover up their people,” said David Mc Kay, DA spokesperson on Cogta in the Free State Legislature.
He said the report also revealed more adverse finding.
“More shocking evidence is that the Free State has not seen a single clean audit in nine years, and the last clean audit we saw was in 2016. Free State municipalities spent R66,54 million on consultant fees and lost R1,5 billion on fruitless and wasteful expenditure.
“When calculated, this translates to almost R400 per capita for the province. This is close to six times more
per capita than Gauteng, which has close to five times our population,” said Mc Kay.
