Over R3 billion worth of wasteful expenditure in Mpumalanga municipalities

By Bosman Grobler MPL, DA spokesperson on CoGTA:

According to the latest Municipal Finance Management Act (MFMA) Audit Outcomes, Mpumalanga municipalities have managed to rake up a whopping R1.415 billion in unauthorised, irregular, fruitless and wasteful expenditure for the financial year under review.

This is on top of the R1.949 billion that has accumulated over the past financial years, which has not been dealt with as required by the MFMA, effectively meaning that municipalities did not determine whether any of this expenditure resulted in money being wasted or if fraud had been committed.

Overall, this brings up a total of R3.364 billion worth of unauthorised, irregular, fruitless and wasteful expenditure as per the last Auditor General audit.

In his 2013/2014 MFMA report, Auditor General (AG) Kimi Makwetu states that, “The overall audit outcomes of the province have regressed since 2007-08, with fewer auditees in the unmodified (clean or unqualified with findings) category”.

The AG also mentioned that compliance with key legislation remains a challenge in the province. He said 16 of the 21 municipalities reported on did not comply with key legislation. He added that only two municipalities had no material findings in this area.

Amongst the AG’s findings were:

–      355 instances of awards to employees, councillors and other state employees, with an overall value of R136,9 million.

–      In 80% of financial reporting cases, where 15 municipalities used consultants, the consultants were appointed because of a lack of skills and partially vacancies.

–      Even though 15 municipalities had filled the CFO positions, 13 of these municipalities still used consultants for financial reporting. Preparation of financial statements is one of the core responsibilities of a CFO. The AG said “it is concerning that consultants are still being used by municipalities to perform the duties of an appointed CFO”.

–      And due to poor controls at municipalities, the scope of the consultants was usually extended to clean up the accounting records first before preparing the financial statements, leading to R55 million being spent on consultants.

–   87% of the Municipal Infrastructure Grant was spent by municipalities, with only 44% of targets being achieved.

These AG findings point to a lack of adequate political and administrative leadership in our municipalities. Municipalities where freedom is afforded to those who are politically connected. Municipalities where fairness is compromised, and opportunities are given to those who follow specific political lines. Municipalities that see the AG’s concerns as just mere recommendations.

As long as the ANC continues to ignore the recommendations of this Chapter 9 institution, the woes in municipalities will increase, while service delivery dwindles.

The leadership in the province needs to respond to the AG’s messages of concern, employ key officials with the appropriate competencies and ensure that there are consequences for poor performance and transgressions.