No clean audits as FS Municipalities waste R3,5 billion
09 June 2015
Not a single Free State municipality obtained a clean audit for the 2013/14 financial year. As a result of this entrenched culture of financial mismanagement, the province lost almost R3,54 billion in irregular, unauthorised and fruitless and wasteful expenditure as per the Auditor-General (AG) Municipal Audit Outcomes report for the 2013/14 financial year.
We are extremely concerned at the 49% or R89 million increase in fruitless expenditure from the previous financial year to R272 million. Irregular expenditure also increased by R24 million to R934 million.
Free State municipalities carry a collective household debt of R9,1 billion of which only R2,3 billion is expected to be recovered.
The AG also reported that Free State municipalities collectively owed ESKOM in excess of R1,5 billion as at 30 June 2014. This debt has grown by R200 million since then and the province owes ESKOM more that R1,7 billion.