Municipalities forever ailing

2016-06-02 06:00

Local government’s audit reporting standards have increased significantly in the past five years, but the financial health of 92% of municipalities is concerning, or require intervention.

The auditor-general’s annual report on municipalities’ performance indicated that 72 municipalities received unqualified audits in the 2014-’15 financial year, compared to only 13 five years ago.

But the picture of financial management in general is a sombre one: irregular expenditure has more than doubled since 2010-’11 to R14.75bn. Fruitless and wasteful expenditure was more than R1bn higher than in 2010’-11 at R1.34bn and unauthorised expenditure increased threefold from 2010-’11 to R15.32bn.

“The main reason for the unauthorised expenditure was because of the overspending of the budget,” said auditor-general Kimi Makwetu, “and more than 60% of the overspending relates to non-cash items not budgeted for.” he said.

Makwetu said it was worrying that municipalities rely so heavily on the use of consultants to prepare their financial statements. “The consultancy costs for financial reporting services increased over the past five years to R892m.”

In many instances the reliance on consultants are not justified as 68% of the municipalities that used consultants’ services had weaknesses in the financial reporting sphere.

The Western Cape was the province with the highest concentration of clean audits at 73%, followed by Gauteng (33%) and KwaZulu-Natal (30%).

“However, there are still other internal control weaknesses and a lack of administrative and financial disciplines at certain municipalities in these provinces, namely the Central Karoo, West Rand in Gauteng and Umkhanyakude districts in KZN.”

Problem provinces are Limpopo, North West and the Northern Cape where the audit outcomes have been “disappointing at best”, Makwetu said.

Focused political will and a huge investment in ensuring the basics are done right are required to restore good governance.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

Inside News24

 
PARTNER CONTENT
INFOGRAPHIC: New thinking required for retirement

Everything we believe about retirement is fast becoming outdated.

PARTNER CONTENT
WATCH: How education can change a life

A university education gives students the chance to create a better future for themselves, their families and to opportunity achieve their dreams.

/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.