The ACDP notes with concern the recent 2022-23 consolidated general report on local government audit outcomes presented by Auditor General (AG) Tsakani Maluleke to Parliament.
We find it extremely alarming that just 34 of the 257 municipalities in South Africa achieved clean audits for the 2023 financial year. According to the report, 36 municipalities regressed since the 2020-21 audit cycle, with only 45 showing some improvement.
Outcomes of the municipalities (including those finalised after 31 March 2024) include:
- 34 clean audits
- 110 unqualified with findings
- 90 qualified with findings
- 6 adverse findings
- 14 disclaimed with findings
- 3 outstanding audits
The estimated value of infrastructure assets that local governments should maintain and protect totalled R518,35 billion in the year under review, based on the values as disclosed by municipalities in their financial statements. The poor maintenance of these assets impacts on service delivery and places our residents at risk.
It is very clear that our municipalities and their entities are in a state of financial crisis. This state of affairs cannot and must not be allowed to continue, especially when the AG pointed out that unauthorised expenditure sits at R21,12 billion, and fruitless and wasteful expenditure sits at R7,41 billion, with little to no consequence management in place to address these issues. This would never be tolerated or allowed under an ACDP government.
Despite commitments having been made, the pace of improvement has been slow with little impact on the lives of ordinary South Africans, according to the AG.
The ACDP has on several occasions, and in prior administrations, called on the Ministry of Cooperative Governance and Traditional Affairs to do more to ensure that municipalities adhere to the MFMA. Over the years, we have called for turnaround interventions to be implemented to stop the rot, but sadly, this has repeatedly fallen on deaf ears. We are of the opinion that until the practices of the MFMA and PFMA are strictly followed, the required financial and performance management practices will not be realised. The report indicates that there continues to be a significant problem with 86% of municipalities receiving material compliance findings, slightly worse than in previous years. Further to this, 45% of municipalities did not comply with legislation on strategic planning and performance management.
The ACDP echoes the Auditor General’s call on all role-players in the accountability ecosystem to urgently foster a culture of performance, accountability, transparency, and institutional integrity that can bring about a better life for all in South Africa. We implore elected representatives across political lines to show increased vigour, pride, and political will in their political oversight, and to unbiasedly hold the Executive to account.
We call on the Minister Cooperative Governance and Traditional Affairs to bring both national and provincial government together to better support our municipalities, who currently display an inability to comply with legislation. Cooperative efforts are needed now more than ever to effect real improvement in the financial health of municipalities, and to speed up quality service delivery to our people.
It is reported that municipalities are losing revenue because of inadequate billing and collection practices, and infrastructure neglect leading to water and electricity losses. Financial mismanagement directly affects service delivery with unpaid creditors, including Eskom and water boards, threatening to cut supply, thus affecting basic services to households and hindering business operations. This the ACDP views as a major stumbling block which negatively impacts our economic growth.
The ACDP acknowledges that the submission of financial statements by the legislated date has improved, with 94% of municipalities meeting the deadline in 2022-23, up from 91% in 2021-22 and 81% in 2020-21. This small positive, however, is overwhelmingly overshadowed by the continued poor performance of many municipalities in South Africa as reflected in the pages of the AG’s report.
South Africans deserve ethical and diligent public representatives with servant leadership qualities who will not participate in corrupt and unlawful activities. The ACDP has South Africa such leaders — leaders who will ensure that services to the our citizens are delivered and that the associated targets are met.
