Staff Reporter
Most municipalities in the Free State are ignoring set regulations because there are no firm measures to hold those who break the rules accountable, Auditor General (AG) Tsakani Maluleke said.
In her latest report on local government audit outcomes for 2019-2020, she said this has resulted in the municipalities failing to deliver quality services to residents because resources are not used optimally.
“Lack of accountability creates a perpetual disrespect for regulations, resulting in mismanagement of resources and lack of service delivery,” said Maluleke when she released the audit outcomes on Wednesday.
The AG said overall, municipal audit outcomes in the province have regressed since 2016-17.
She said the province has not achieved a clean audit since Fezile Dabi district’s clean audit in 2015-16.
Some municipalities, however, have fluctuated between audit outcomes, improving one year and regressing the next.
“Our assessment since 2016-17 has shown that there had been a regression in the assurance provided by political and administrative leadership,” said Maluleke.
“None of the assurance providers offered the required level of assurance and the majority of them provided limited or no assurance at all.
“There was a lack of responsiveness to implement and monitor the audit action plans to enable the implementation of effective accountability.”
Maluleke said mayors at poorly operating municipalities did not hold councils accountable for the lack of improvement.
She said this cascaded to different levels in all municipal levels as councils also failed to hold municipal managers and the senior managers that report to them accountable for not fulfilling their duties.
The AG found that most municipalities continued to implement ineffective, short-term solutions to address shortcomings in their underlying controls, through the use of consultants – with a limited transfer of skills.
Other than Thabo Mofutsanyana District Municipality, Maluleke said all municipalities appointed consultants for financial reporting at an aggregate cost of R46.8 million
In the 2018-19 financial period, they spent nearly R30.9 million.
“These consultants performed tasks such as monthly reconciliations, asset verifications and updating irregular and fruitless and wasteful expenditure registers. This situation is even more concerning as there were already people employed to perform such tasks.
“The chief financial officers relied on the consultants to provide audit support and to assist with the responses to audit findings, even on non-technical matters, instead of municipal staff – in spite of paying R280.28 million in finance unit salaries,” said Maluleke in the report.
According to the report, efforts by the provincial treasury to support municipalities in clearing audit findings by deploying officials to attend audit steering committee meetings were not yielding visible results as the move was rather reactive in nature and not a proactive form of support to improve the control environment.
Nine of the 23 municipalities in the province, or 39 percent, did not submit their financial statements on time.
The municipalities incurred irregular expenditure of over R3 billion as a result of not following supply chain management prescripts.
Matjhabeng, Setsoto and Mohokare local municipalities were the top three contributors with R340 million, R184 million and R183 million, respectively.
Unauthorised expenditure by all Free State municipalities amounted to nearly R4.4 billion.
Fruitless and wasteful expenditure stood at R603 million.
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