Kimi Makwetu, auditor general of South Africa (AG), will in the near future have the power to act against any municipality who is found to have wasted public funds.
This was decided on Wednesday 27 June when the Select Committee on Finance in parliament adopted the Public Audit Amendment Bill without amendments.
The bill will allow the AG to refer undesirable audit outcomes, arising from an audit performed under the act, to an appropriate body for investigation, and to provide for the AG to recover losses in certain instances against the responsible persons.
Additional provisions also form part of the bill.
The AG reported in May that audit outcomes across the country dropped significantly in the 2016/2017 financial year.
In the 2015/2016 financial year there were 48 clean audits nationally, but has dropped to 33 in the 2016/2017-financial year, according to the report. No municipality in Limpopo received an unqualified report.
Out of the 257 municipalities and 21 entities, 45 regressed and only 16 improved.
Bela-Bela received a qualified audit with findings, whereas the Modimolle-Mookgophong municipality did not receive an audit opinion. This was due to the audit not being finalised on the legislated date.
According to the AG’s report Bela-Bela’s audit issues included missing evidence regarding infrastructure assets, misstatements not rectified, unexplained cash flow statements, errors in financial statements, irregular expenditure, the writing off of debt, basic services financial losses, unspent grants, and fruitless and unauthorized expenditure. Bela-Bela is also one of the five municipalities that has regressed in the province.
The municipality received an unqualified audit during the 2016/2017 financial year. At that time Morris Maluleka was the municipal manager.
Three key positions at the municipality were filled earlier this year by Sello Michael Makhubela (the new municipal manager), Ramadiga Melvin Marutha (chief financial officer) and Jamela Selapyane (head of corporate services).
Makwetu said in a statement that the problem of accountability, wrongful governance and regression persisted, and there has been no positive change toward credible results. Also that the AG’s counsel was ignored.
He further said that the province is characterized by the complacency with unqualified financial statements being seen as “good enough”.
This is despite premier Stanley Mathabatha’s commitment in the previous year to implement stricter consequences.
Irregular expenditure has also increased from R16 billion to R28 billion on a national level in the last financial year. A total of 112 municipalities do not have the money to carry out service delivery plans for the current financial year, and only 14 of them have approved financial recovery plans, Finance minister Nhlanhla Nene said in a written parliamentary response before the audit outcomes were made public.
Makwetu warned that a lack of local government accountability can have a negative impact on the lives of citizens.
The Public Audit Amendment Bill was referred to the national council of provinces for concurrence after the National Assembly unanimously gave it the thumbs up last week.
Charel de Beer, committee chairperson, said the bill will give the AG the power to take remedial action.
Tinus Ras, DA councillor and member of the executive committee, said the new bill is a fantastic idea and the DA welcomes the initiative from government.
Ramadiga Melvin Marutha, chief financial officer at the municipality, said should this come into effect, every municipality must subscribe to it and accept the responsibility towards their ratepayers by ensuring that no public funds are misspent. Marutha also promised that they are aiming for a clean audit for the current financial year.
