Local government is the weakest link
29 May 2018
The results of overall 2016/2017 audit outcomes prepared by the Auditor-General (AG) of the 257 municipalities are in. The results are grim and make clear that the local government system in South Africa is failing. The crux of the AG’s report is that of the 257 municipalities audited‚ 45 regressed and only 16 improved. Only 33 municipalities (13%) managed to produce quality financial statements and performance reports and complied with all key legislation‚ thus receiving a clean audit.
The number of municipalities with clean audits decreased from 48 in 2015/2016, to 33. In addition, 112 municipalities received unqualified audit reports with findings, up from 108 in the previous year. Qualified audit outcomes increased from 60 to 66, and four municipalities got an adverse report with findings.
Irregular expenditure increased by 75% - from R16.2 billion to R28.3 billion. Of this, R15 billion related to irregular expenditure from previous periods only detected in 2016/2017. The balance of R13.3 billion related to expenses paid in 2016/2017. Fruitless and wasteful expenditure increased to R1.5 billion, while unauthorised expenditure dropped by 9% to R12.6 billion.
The dismal performance of local municipalities threatens the gains made post-1994 while many areas, particularly rural areas, remain unchanged at their core. This in turn threatens South Africa’s constitutional democracy in a number of ways.