No clean audits as FS Municipalities waste R3,5 billion

By David van Vuuren, DA Chief Whip in the Free State Provincial Legislature:

Not a single Free State municipality obtained a clean audit for the 2013/14 financial year. As a result of this entrenched culture of financial mismanagement, the province lost almost R3,54 billion in irregular, unauthorised and fruitless and wasteful expenditure as per the Auditor-General (AG) Municipal Audit Outcomes report for the 2013/14 financial year.

We are extremely concerned at the 49% or R89 million increase in fruitless expenditure from the previous financial year to R272 million. Irregular expenditure also increased by R24 million to R934 million.

Free State municipalities carry a collective household debt of R9,1 billion of which only R2,3 billion is expected to be recovered.

The AG also reported that Free State municipalities collectively owed ESKOM in excess of R1,5 billion as at 30 June 2014. This debt has grown by R200 million since then and the province owes ESKOM more that R1,7 billion.

Our claims that the ANC in government seeks only to line the pockets of its most loyal cadres have been vindicated by the AG. Through abuse of the tender process, Free State municipalities awarded 233 contracts worth R165,2 million to ANC councillors, municipal employees, close family members and political friends.

The financial health of Free State municipalities are dire. Ironically the lofty ideals of ‘Operation Clean Audit 2014’, which has evidently failed, has been replaced by ‘Operation Back to Basics 2015’, which will also fail due to the lack of accountability in ANC-led municipalities.

The AG has shown that all ANC-led municipalities in the Free State have flouted almost all good financial practises resulting in a deterioration in the audit outcomes of all municipalities within the province. In fact, all Free State municipalities relied on consultants, at a cost of R130 million, to assist in their financial reporting due to a lack of skills by municipal finance managers and CFOs.

The province is in a critical state of dysfunction. It is unable to deliver the most basic of services in most of the municipalities such as the collection of refuse, the maintenance of roads, and the smooth operation of water and sanitation services.

The DA is the only party with a credible track record in governance. All Western Cape municipalities received unqualified audit opinions, 18 of these received completely clean audits and 14 received unqualified opinion outcomes with minor findings. Compared to the Free State which received nine disclaimer opinions, six qualified with findings and 14 unqualified with findings, it is evident that the DA is by far the better party at local governance.