Local governance decline not surprising - OUTA

2019-06-27 10:49
AG Kimi Makwetu. (Lisa Hnatowicz, Gallo Images, Beeld, file)

AG Kimi Makwetu. (Lisa Hnatowicz, Gallo Images, Beeld, file)

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The Auditor-General's (AG) report that local governance has continued to decline to levels never seen in the history of democratic South Africa is not surprising, the Organisation Undoing Tax Abuse (OUTA) said on Wednesday.

"It is simply appalling that only 8% of our municipalities received clean audits and that R21.2bn was accounted for as irregular expenditure," said Julius Kleynhans, OUTA's operations manager for local government.

"Provincial oversight and interventions are not working because of political interference and the lack of holding transgressors to account."

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Kleynhans said new Minister of Cooperative Governance and Traditional Affairs (Cogta) Nkosazana Dlamini-Zuma and newly appointed MECs should fix the situation if they wanted to save the country from a complete collapse.

"OUTA is willing to assist government with this turn-around in municipalities. Municipalities form the lifeblood of South Africa. It's where we work, live and create a life. If it fails, the country fails. Hence, we need to do everything in our power to ensure it succeeds."

READ: Auditors faced threats, intimidation over findings

Municipal audit report

AG Kimi Makwetu released the latest municipal audit report in Pretoria on Wednesday.

According to the report, only 18 out of 257 municipalities in South Africa received clean audits, down from 33 in the 2016/2017 financial year.

One in three municipalities spend more than they earn, Makwetu reported; 34% of could not balance their books, recording expenditure that exceeded their income, News24 reported.

OUTA's CFO and local government financial analyst Godfrey Gulston said their engagement in various municipalities revealed that the management and accounting skills of municipal managers and CFOs was "sorely lacking, giving rise to a lack of understanding and basic knowledge of how to run these vital institutions".

"There seems to be a culture of entitlement among some municipal staff that they have been elevated to officials rather than public servants and this must be stopped. External influences of exorbitant costs by Eskom, water boards, Samwu (SA Municipal Workers' Union) and Salga (SA Local government Association) make services unaffordable. This leads to payment defaults that creates cash flow issues, which hamper the ability to pay suppliers and in effect drains cash reserves."

The lobby group expressed concern about the lack of action or knowledge of the root causes of municipalities' problems by treasury and Cogta MECs.

"There has been a dire lack of spending on maintenance and repairs by most metros and municipalities over the past decade. This is now giving rise to the collapse of infrastructure and the resultant sewage spilling onto our streets and into our rivers, causing deteriorating water quality. Not to mention decay of roads, bridges and other vital structures for local economies," the organisation said in a statement.

"Adding to the problems are hundreds of transgressions of procurement which has led to rampant corruption. Whilst salaries are somewhat guaranteed and ever increasing regardless of performance, radical intervention is needed to restore customer service and ensure the people get the best value for their rates and taxes."

Gulston said municipal management processes and structures needed to be changed.

"We call on the president to set up an urgent local government summit, at which the issues of transparency and accountability at local government needs to become the order of the day. If we don't get fast improvements into the management of our municipalities, there will be more community revolts with the potential to result in a total collapse of some municipalities."

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