A-G Report: R15 billion in irregular expenditure confirms ANC's poor record of governance 

1 June 2016

Today’s release of the Auditor-General’s (A-G) audit report into municipal financial management for 2014/15 has once again placed the DA-run municipalities in the Western Cape at the top of the pile. The DA is pleased and is working hard to bring this sound finanacial management to more and more munucipalities across the country after the 2016 Local Government Elections (LGE2016).

The A-G’s report shows that the Western Cape has the highest proportion of municipalities with clean audits with 73%. This is further evidence that where the DA governs, good, clean management of South Africans’ money allows for these municipalities to deliver the basic services our people are so desperate for.

This audit report serves further to confirm that where the ANC governs financial irregularity is rife and leads to the financial meltdown of municipalities who then cannot deliver services. This is often for the sole purpose of self-interest and self-enrichment while people in communities all across municipalities where the ANC govern suffer without basic services.

Specifically the A-G’s audit report shows that only 33% of Gauteng municipalities meet the standard of good financial management while KwaZulu-Natal (KZN) sits at 30% in the same measure compared to the 73% achieved by the DA-run Western Cape.

The report also shows that:

- Irregular expenditure in ANC municipalities has more than doubled since 2010/11 financial year and is currently at an overall R14.75 billion. This is largely attributable to an increase in non-compliance with - - - Supply-Chain Management legislation. The biggest culprits of this are municipalities in the Eastern Cape, North West, Limpopo and Mpumalanga; most of which are governed by the ANC.

- Fruitless and wasteful expenditure in ANC-run municipalities has increased by more than a billion rand since 2010/11.

- Unauthorised expenditure in ANC-run municipalities has increased three-fold to an astronomical R15.32 billion.

- In the Western Cape, the ANC-controlled Central Karoo district is singled out for bad performance with the A-G reporting that its officials lack appropriate skills and competencies.

The A-G, Thembekile Makwetu, stated himself that, “poor quality of financial statements submitted to us for audit and the continuing reliance on consultants for financial reporting services call into question whether reporting and management of finances by municipalities are solid.”

Just yesterday the DA’s Metro Mayoral candidates revealed that the largest ANC metros have wasted almost R20 billion in unauthorised, irregular and wasteful expenditure since 2011 which has today been confirmed by the A-G.

All indicators show that the DA’s governance record is better than the ANC’s. Recently, Good Governance Africa found that 9 of the 10 best-run Municipalities have DA governments, and 10 out of 10 of the worst-run have ANC governments.

The DA’s Metro mayoral candidates revealed a reply from the Minister of Cooperative Governance and Traditional Affairs that showed ANC-run Metros to be in abysmal financial disarray. The reply shows that :

- In Nelson Mandela Bay, R3,4 billion went to irregular, unauthorised, fruitless and wasteful expenditure.

- In Tshwane, R3,6 billion went to irregular, unauthorised, fruitless and wasteful expenditure.

- In Johannesburg, R4,2 billion went to irregular, unauthorised, fruitless and wasteful expenditure.

- In Ekurhuleni, R975 million went to irregular, unauthorised, fruitless and wasteful expenditure.

This is starkly contrasted with the DA-run City of Cape Town which showed a fraction of such financial irregularity with just R1.4 million going to irregular, unauthorised, fruitless and wasteful expenditure which we are working tirelessly to reduce even further and bring this governance to municipalities across the country.

With these measures the DA can promise a new financial dawn for Nelson Mandela Bay, Tshwane, Johannesburg and Ekurhuleni.

The DA is ready to bring change to Nelson Mandela Bay, Tshwane, Johannesburg and Ekurhuleni; the change we need to move forward again.

Issued by Kevin Mileham, DA Shadow Minister of Cooperative Governance and Traditional Affairs