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Municipalities won’t improve if no consequences for officials – AG

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Auditor-General Kimi Makwetu (Netwerk24)
Auditor-General Kimi Makwetu (Netwerk24)

A proposal to rope in government investigative agencies to lift the lid on the rife misuse of state funds in municipalities is in the pipeline.

The move is expected to expose those involved in wrongdoing and implement corrective measures.

Auditor-General Kimi Makwetu told reporters at a media briefing today into 2015-16 municipal audit outcomes that a proposal has already been made in Parliament to approve extending the powers of his office.

Makwetu was flanked by Cooperative Governance and Traditional Affairs deputy minister Andries Nel and South African local government association (Salga) national executive committee member Mpho Khunou, among other officials.

Currently the AG’s office conducts audits and has no powers to investigate irregular, fruitless and wasteful expenditure.

Parliament was expected to look into the proposal and set processes towards its implementation.

If approved, the AG would submit a list of municipalities to be investigated to the Hawks, the Special Investigating Unit and the Public Protector where possible.

There was no timeframe when the plan would come to fruition but parliamentarians were expected to deliver before their term of office comes to an end.

It was likely that referrals could start in earnest by next year.

He said municipalities should implement consequence management – discipline – on officials who fail to comply with applicable legislation while appropriate and timely action be instituted against transgressors.

“Without entrenched consequence management systems, the local government audit results we have just released are unlikely to shift or change towards the desired state.

“We believe the introduction of requisite consequences will go a long way in turning the tide toward wholesale good governance in the public sector,” Makwetu said.

This comes as the AG noted that municipal audits for the past financial year (2015-16) had limited improvements.

He said overall the local government has failed to maintain the promising five-year momentum gained in the years 2010-11 to 2014-15 that he reported on last year.

Makwetu said irregular expenditure in municipalities has increased by just over 50% since the previous year to R16.81 billion.

He said fruitless and wasteful expenditure was 21% lower in 2015-16 than in the previous years at R901 million.

Unauthorised expenditure remained almost at the same level as in the previous year at R12.77 billion.

He said the expenditure budget for municipal sphere in 2015-16 was R378 billion.

The Western Cape, KwaZulu-Natal and the Eastern Cape have the highest proportion of municipalities with clean audits in 2015-16.

The Eastern Cape showed the greatest improvement and together with Limpopo and Mpumalanga, they showed momentum in the right direction, Makwetu said.

He named North West, Northern Cape and Free State as provinces with the poorest audit results based on the number of municipalitities with disclaimers, adverse opinions or outstanding audits.

Gauteng was the only province with 100% municipalitities obtaining unqualified audits.

However, only Midvaal could hold on to its clean audit status.

Only one metro – City of Cape Town – and 14 district municipalitities received clean audits.

Nel said his department welcomed the AG report.

He said the system of local government is comparatively young and there have been consequences where mayors have been removed from their positions, unviable small municipalities merged and processes taken together with Salga and the National Treasury to strengthen financial management.

Khunou said monies should be recovered from municipal authorities implicated in any irregular expenditure.

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