Local government, that is municipalities, are responsible for providing the most basic, yet essential services in this country – housing, sewage facilities, waste management, roads, water sanitation and key public security functions, among many others.
When the financial units of these institutions are shown to be riddled with mismanagement, lack of accountability and corruption, service delivery fails; which fuels public outrage and violent protest across the country.
Auditor-general Terence Nombembe’s municipal audit outcomes for 2010-2011, released a few days ago, paint a gloomy view of local government. Only 13 municipalities – a mere 5% of the total number in the country – were found to have clean books. And not one metropole was among these.
It’s this which earns the third tier of government the title “zero of the week”.
The successful 5% were spread across KwaZulu-Natal, Mpumalanga, Western Cape and Limpopo – leaving the municipalities in the five remaining provinces without a single clean audit among them.
The auditor-general’s report also revealed that local government officials and their families personally profited more than R800-million in the 2010-2011 financial year through the awarding of municipal tenders.
The report stated that the municipal workers either owned the companies that received the tenders or were friends or family of the successful bidders.
According to Sowetan, the pocketed sum was part of R11-billion mentioned in the report as having been spent in unauthorised, irregular, fruitless and wasteful expenditure.
And this profiteering is getting worse: “These prohibited awards have more than doubled in just a year, from 22% to 46%, as officials take advantage of their councils' weak procurement controls which fail to detect whether declarations of interest were submitted,” the article reads.
Gauteng municipalities were the worst in terms of giving tenders to firms linked to senior staff, then KwaZulu-Natal and then North West.
The audit results are also an indication of municipalities being far from achieving the goals of Operation Clean Audit 2014 – a government initiative launched in 2008 to promote good governance and accountability.
The ultimate aim is that by this year, all 283 municipalities and provincial departments across the country will achieve clean audits on their annual financial statements.
The first step towards reaching this was for no municipality to have an adverse opinion or disclaimer by the end of the 2010-2011 financial year.
“There were no fewer than 64 municipalities (23% of the total) with adverse opinions or disclaimers, and a further 37 just didn’t submit in time,” the Daily Maverick reported, adding that Nombembe and his staff would continue visiting troubled municipalities to provide assistance as part of Operation Clean Audit.
Finance Minister Pravin Gordhan, who attended the auditor-general’s briefing in Johannesburg, announced that Treasury would now adopt a more hands-on approach to its financial oversight role.
“We are now going to implement the announcement we made in the budget speech. Within the next two weeks we will start advertising for the position of chief procurement officer. We are going away from passive oversight to actively enforcing the implementation of procurement legislation,” Gordhan said.