No clean audits for Free State municipalities

2015-06-10 14:27

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Bloemfontein - Not a single Free State municipality achieved a clean audit last year, partly because almost 60% of chief financial officers were deemed incompetent, according to the Auditor General.

A total of R3.54bn could not be accounted for due to unauthorised, irregular or fruitless and wasteful expenditure.

This information is contained in the AG's General Report on the Audit Outcomes in the province.

It noted that financial health at a local government level deteriorated significantly during 2013-14.

The net current liability position of the local municipalities, primarily responsible for service delivery, is R2.4bn.

According to the report, there are three main reasons for this situation: Key officials lack appropriate competencies, management show slow response to warning signals and there are no consequences for poor performance and transgressions.

All 27 municipalities made use of consultants for financial reporting at a cost of R130m. The AG noted that all these services were functions that should have been performed by the chief financial officers and their finance teams.

The main reason for the high use of consultants is a combination of a lack of skills and the vacancies within municipalities for both financial and performance reporting.

Only 61% of these chief financial officers were deemed competent and consultants were necessary to compensate for the lack of skills and vacancies in the finance units.

At the root of the problem lies municipalities’ poor revenue collection. In total, local municipalities in the province are owed R9.1bn by consumers for services.

However, of this amount, 75% had been provided for as irrecoverable. Thus, only R2.3bn is expected to be recovered.

These results are despite Operation Clean Audit, which was announced in 2009 in Parliament, expecting 100% of local governments to achieve this status by 2014.

Read more on:    bloemfontein  |  government spending  |  service delivery  |  local government

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