MEC warns to tighten screws on municipalities who get ‘bad audits’
Unauthorised expenditure remained almost at the same level as in the previous year at R12,77 billion. In total, 55% of the overspending related to non-cash items – in other words, estimates of depreciation or impairment that were not correctly budgeted for.
Municipalities blew R16,8 billion on irregular expenditure in 2015/16 – an increase of over 50% and the highest since the Auditor General started tracking the values.
Releasing his local government outcomes report, Kimi Makwetu, said overall the local government had failed to maintain the promising five-year momentum – gained in the years 2010-11 to 2014-15 – that he reported on last year.
However, Mr Makwetu emphasises that ‘irregular expenditure does not necessarily represent wastage or mean that fraud has been committed. This needs to be confirmed through investigations to be done by the council, but losses could already
have arisen or may still arise if follow-up investigations are not undertaken.’
He further points out that ‘the track record of local government in dealing with irregular expenditure and ensuring that there is accountability is poor. The year-end balance of irregular expenditure that had accumulated over many years and had not been dealt with (through recovery, condonement or writing off) was R41,7 billion.’
Fruitless and wasteful expenditure
Fruitless and wasteful expenditure was 21 % lower in 2015-16 than in the previous year at R901 million. Despite this notable decrease, a number of municipalities still incurred this form of expenditure during the period under review
Unauthorised expenditure
Unauthorised expenditure remained almost at the same level as in the previous year at R12,77 billion. In total, 55% of the overspending related to non-cash items – in other words, estimates of depreciation or impairment that were not correctly budgeted for.
KZN COGTA MEC TIGHTENS SCREWS ON MUNICIPAL AUDIT REGRESSIONS
KZN MEC for Cooperative Governance and Traditional Affairs (Cogta), Nomusa Dube-Ncube, has welcomed the latest municipal audit outcomes which place KZN as the second best-performing province within the country but which also register several regressions.
“We are deeply disappointed by the decline in the number of municipalities receiving clean audits. Indeed, we want the mayors and councillors to take full responsibility and turn things around,” said Dube-Ncube.
“We have already had meetings with mayors, councillors and municipal managers of municipalities that have caused KZN to regress from its clean audit performance. As Cogta, we are dead serious about managing consequences for poor performance when it comes to municipalities. We want mayors to ensure that there are consequences for those who have dropped the ball,” said Dube-Ncube.
“Our message to poorly performing municipalities is clear: there must be harsh consequences for poor municipal performance and we want those responsible units and officials held accountable.
“Municipalities have been urged to consider drastic measures including, among others, reprimanding the CFOs and Accounting Officers. We have already taken a decision that there will be no bonuses or salary increases by all those that received poor audit outcomes and we will be monitoring that bonuses and increment are not paid as a ritual but reward excellent performances. We can’t pay bonuses when the municipality’s financial books are in shambles,” said Dube-Ncube.
KZN Cogta is also urging individual councillors to play a robust oversight role in their respective municipalities to ensure that recurring audit issues are addressed timeously in municipal oversight committee and municipal councils and that consequence management is performed adequately.
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