Minister of Finance Tito Mboweni has given South Africa’s 278 municipalities and their municipal entities – such as the City of Joburg’s waste removal entity Pikitup – a two-month extension to submit their annual financial statements in light of the Covid-19 pandemic.
The annual financial statements, reports and oversight reports were originally due by the end of August. These must now be submitted by the end of October.
National Treasury, in a statement on Friday, said the decision resulted from discussions with Minister of Cooperative Governance and Traditional Affairs, Nkosazana Dlamini-Zuma.
The exemption was granted in terms of section 177(1) (b) of the Municipal Financial Management Act, which says the minister may “delay the implementation of a provision of this act for a transitional period not exceeding five years from the date when this section takes effect”.
“The lockdown impacts on the ability by municipalities and municipal entities to prepare and submit quality annual financial statements that meet the uniform norms and standards, related reports and processes to discharge their accountability towards the public regarding the utilisation of public funds,” Treasury said.
The lockdown had impacted the availability of municipal staff and operations to prepare the statements, a task which involves activities such as the physical verification of assets, meter reading and the finalising supporting documentation.
“The effects of an exemption will also assist in mitigating anticipated widespread noncompliance with section 126, 127, 129 and 133 of the MFMA due to the national state of disaster and lockdown restrictions,” the statement said.
The municipal audit outcomes of municipalities and their entities have been far from glowing in recent years. In July, Auditor General Kimi Makwetu said in the 2018-19 financial year, fruitless and wasteful expenditure increased by R2 billion, while unauthorised expenditure remained high at R11 billion, and irregular expenditure stood at R32 billion.