Staff Reporter.
The case of a Eastern Cape municipality which spent Covid-19 funds on a new vehicle for its mayor illustrates the financial chaos that engulfs South Africa’s municipalities.
This according to Auditor-General (AG) Tsakani Maluleke, who said local government finances were under pressure, reporting R26 billion in irregular expenditure at municipalities in the 2019-’20 financial year.
She said municipalities relied on short-term and costly solutions such as consultants to compensate for the lack of financial management and reporting skills, while supervision and monitoring were not taking place.
On Tuesday, Maluleke briefed a joint meeting of Parliament’s Standing Committee on Public Accounts and Standing Committee on the Auditor-General on the 2019-’20 municipal audit outcomes and the Covid-19 municipal expenditure.
The worsening financial situation is captured by the fact that out of the 257 municipalities across the country, only 27 received clean audits. According to Maluleke’s figures, 89 were unqualified, 66 were qualified, six were adverse and 12 disclaimed, while audits in 57 municipalities were not completed. The unqualified and qualified audits were with findings.
In the Eastern Cape, Maluleke reported that while there has been an improvement in outcomes, it might not be sustainable due to poor control environments.
“Once again, procurement was a problem,” she said, adding: “There were instances [where] relief funding was used for something other than Covid-19. An example of this is a municipality in the Eastern Cape where the funds were used to buy the mayor a car rather than this intended purpose.”
The details of the municipality in question were not revealed.
In total, 15 municipalities in the province received unqualified audit reports with findings, while 14 had qualified reports with findings.
On the Free State, Maluleke said accountability can be realised through a decisive leadership tone.
“Lack of accountability creates a perpetual disrespect for regulations, resulting in mismanagement of resources and lack of service delivery,” she said in her report.
She also used the troubled Maluti-A-Phofung municipality, which owes Eskom R5 billion, as an example.
The province has 11 municipalities with qualified audit reports with findings.