AG report on municipal finances once again highlights the need to implement advanced financial and management systems in municipalities

15 June 2022

The recently issued report by the Auditor-General (AG), Tsakani Maluleke, on the state of municipalities in the country shines the spotlight on the gravity and extent of decay, and large-scale mismanagement in ANC-controlled municipalities.

The report on the 2020/21 financial year indicates, among other things, that irregular expenditure amounting to R20,45 billion was identified at 64% of municipalities, and that in the foreseeable future, 28% of municipalities will no longer be considered going concerns in legal terms.

Only 16% of all municipalities received unqualified audits, and substantive irregularities were found to have occurred at 22 municipalities.

The fact that 64% of municipal debt is considered to be unrecoverable further highlights the unacceptable levels of incompetence in municipal managements countrywide.

There are no proper control and collection systems in place, and the political will to clamp down on those who do not pay for municipal services is obviously lacking.

It is abundantly clear that the urgent implementation of proper, existing technology and management systems should be the highest priority.

Continuous digital financial assessment systems will limit financial irregularities, and ensure proper recordkeeping and accurate audits.

It is time for the ANC government to stop making empty promises and talking about the technological revolution, and to start implementing those systems. If government keeps dragging its feet, it will cost taxpayers many more billions in squandered tax money.

The report also confirms the negative impact of the ongoing ANC infighting and the consequent instability in municipal service delivery.

Free State and North West residents have been affected by the consequences of the ANC's infighting for very long.

The AG also emphasised that a lack of ethical political leadership has resulted in a lack of accountability, and a general state of disorder in some provinces.

The communities of all municipalities must join hands and hold the local political leaders in municipalities accountable for the mismanagement of their scarce resources.

Issued by Michal Groenewald, FF Plus MP and chief spokesperson: Cooperative Governance and Traditional Affairs (COGTA), 15 June 2022