26 June 2019
SAMWU Concerned by the Regression in Municipal Outcome
The South African Municipal Workers’ Union (SAMWU) is concerned by the regression in Municipal Audit outcome as presented by Auditor General Kimi Makwetu for the financial year 2017/18. In presenting the audit outcomes, Makwetu noted that this was the worst outcome in 15 years and that Local Government is at a state of extreme distress. Irregular expenditure has decreased to R21.2 billion, a figure which is unacceptably high as it represents 5% of municipalities’ total budget.
Of great concern to us is that the country’s municipalities have incurred over R1.3 billion in fruitless and wasteful expenditure, this according to Makwetu it is money which has essentially been lost. This is money which could have been used by municipalities to ensure that they fulfil their constitutional mandate of delivering basic services to South Africans while improving the quality of their lives.
Another concern for us is that only 21 of the country’s 257 municipalities managed to get a clean audit. We cannot congratulate the municipalities which got a clean audit because they are supposed to be receiving clean audits.
We are however concerned that 92% of the country’s municipalities failed to achieve a clean audit, this is a clear indication of the challenges that are faced by municipalities.
We lament the fact that municipalities in Limpopo have spent over R170 million on financial consultants despite these municipalities having Chief Financial Officers (CFO) on their payrolls. According to Makwetu, CFOs in these municipalities lack the technical skills and knowledge required to fully execute their duties. Countrywide, municipalities have spent a total of R901 million on consultants to assist in preparation of financial statements, money that could have been channelled towards service delivery and better remuneration of municipal workers. We therefore demand that all contracts of CFOs in identified municipalities should be reviewed with the intention of getting the right people fill those posts.
The union is vindicated on its stance that municipalities in the Free State Province are non-existent. According to Makwetu, all municipalities in this province are in financial strain with the possibility of them not being able to fulfil their financial obligations, including the payments of workers. This we have noted when several municipalities in the province issued notices to workers that they would not be paid their salaries on time or in full.
It has always been the stance of SAMWU that municipalities have become breeding ground for corruption and fraud. The Auditor General indicated that a total number of 74 municipalities did not thoroughly follow on allegations of fraud, financial and supply chain management misconduct. The failure by municipalities to follow up and investigate such allegations discourages workers from reporting instances of corruption and fraud as they know that nothing will be done by authorities. This failure also protects the perpetrators from prosecution as they know that municipalities have become free for all to do as they please.
The distress in municipalities has further been compounded by the failure to comply with recommendations made by the Auditor General. We therefore welcome the announcement by Makwetu that his office is now empowered to issue binding remedial action while failure to adhere to this will result in a certificate of debt being issued to the accounting officer and members of the accounting team. We believe that this is a step in the right direction in fixing the rot in municipalities. We however would like to see a situation wherein individuals are held personally liable for failure to comply, particularly those responsible for incurring fruitless and wasteful expenditure.
We therefore call on the Department of Cooperative Governance and Traditional Affairs (COGTA) to step in and assist municipalities particularly in the Eastern Cape, North West and the Free State Provinces. Provincial Governments have proven not to be able to assist municipalities to stabilize, according to Makwetu, “political and administrative leadership, yet again, exhibited no response to improve its accountability for financial and performance management of municipalities”
Issued by SAMWU Secretariat
(073 254 9394)
Deputy General Secretary
(084 806 4005)