Problematic audits undermine Ramaphosa govt – economist

Wednesday’s report by Auditor-General Kimi Makwetu was the first of its kind since the Public Audit Amendment Act came into effect on 1 April last year, giving the auditor-general extended powers to act on corruption and the abuse of public funds.

Makwetu said on Wednesday only nine selected municipalities had been audited in terms of the amended Act this year, though.

He said that regardless, a total of six material irregularities – which had resulted in financial losses of almost R24.5 million – had been identified.

“The material irregularities we identified and reported are not complex accounting or procurement issues and could have been prevented through basic controls,” he said. “It related to assets not being safeguarded, resulting in theft or vandalism, payments for goods and services not received and an unfair procurement process that resulted in overpricing.”

Political economist Daniel Silke said the results undermined the credibility of President Cyril Ramaphosa’s administration.

“The Ramaphosa administration has simply not yet succeeded in getting a grip on the issue of irregular or wasteful expenditure at a local government level,” Silke said. “And these excessively problematic audits undermine the rhetoric coming from government, relating to a cleaner administration going forward.”

Silke also said they raised questions around whether or not there was sufficient political will from within the governing party to become more compliant with the law, and showed just how difficult it was for the ANC to crack the whip.

Econometrix chief economist Dr Azar Jammine, meanwhile, said the problem was cyclical. He said taxpayers wanted to see their money being spent correctly and that when this was not the case, this gave rise to noncompliance.

“The man on the street becomes very reticent to oblige in paying rates and taxes and in many ways that is part of the problem and why we see such high rates of delinquency as far as paying rates and taxes,” he said.

But this, in turn, made it more difficult for municipalities to effectively manage their finances, he said.

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