Fred Nel MPL

DA Gauteng Spokesperson for Local Government

Gauteng municipalities wasted R1.05 billion through irregular, unauthorised and fruitless and wasteful expenditure in the previous financial year (2010/11). This is according to the Auditor-General’s report on the audit outcomes for Gauteng municipalities.

The continued high levels of irregular, unauthorised, fruitless and wasteful expenditure highlights the inability of Gauteng municipalities to improve their financial management systems to prevent the wastage of public money. The Auditor-General’s findings confirm that only 12% of Gauteng municipalities properly complied with financial performance management. Only 24% of Gauteng municipalities conduct proper oversight over their finances and only 43% have a proper leadership culture in their departments.

Six, or 40%, of the 15 Gauteng municipalities obtained qualified audits while the remainder obtained unqualified audits with findings. No municipality in the province obtained clean audits. This despite Premier Nomvula Mokonyane’s recent report to the Legislature that 80% of municipalities in Gauteng received unqualified audits. She also neglected to mention that the 60% of the municipalities that received unqualified audits did so with findings against them.

The Auditor-General’s report highlights other shocking facts about Gauteng municipalities, including:

* R 66 million worth of contracts were awarded to companies in which officials in service of municipalities were owners or shareholders;

* R67 million worth of contracts were awarded to companies in which officials in other government departments were shareholders or the owners;

* Two metros (Johannesburg and Ekurhuleni) awarded contracts to companies owned by councillors from that metro or in which councillors from that metro had shares;

* At least R351.9 million worth of contracts awarded did not adhere to supply chain management processes and were thus awarded in an irregular manner.

* R4.6 billion was lost through material losses (R 2.419 billion) and material impairments of assets (R 2.135 billion).

* Four municipalities were guilty of material underspending. Two municipalities under spent R778 million on service delivery. According to the Auditor General “This underspending, which is not an economic saving, is an indicator of poor financial management and often results in non-performance on service delivery and the neglect of other functions such as maintenance of infrastructure.”

Equally shocking is the Auditor-General’s finding that the provincial government failed to impact on local government in its oversight role in 92% of the instances where it was supposed to. In 8% of instances it only had some impact on municipalities in the province. This points to a complete failure by the Gauteng Provincial Government to impact positively on local government in the province.

This is not surprising as the Gauteng Local Government and Housing department was beset by internal wrangling under former MEC Humphrey Mmemezi. This department, according to the Auditor-General, failed 71% of the time to impact on local government in the province.

It is clear from the Auditor General’s report that local government in Gauteng is in serious trouble and that attempts to turn it around have failed dismally. Gauteng municipalities need serious support from the provincial government in order to fix the financial management mess they find themselves in.

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