Finance Minister Pravin Gordhan warned municipal officials on Monday that government had no intention of extending the January 1, 2013, regulatory deadline for enforcing minimum competency levels for municipal accounting officers, saying that “officials may find themselves without a job, should they fail to comply”.
In a hard-hitting address to some 1 400 delegates attending the Institute of Municipal Finance Officers (IMFO) conference, in Ekurhuleni, Gordhan warned that the deadline, as outlined in regulations promulgated in 2007, were “not negotiable”.
Accounting officers, chief financial officers and senior managers would have to “meet those requirements, or walk out with your bag”. “Generally, municipalities wait until the eve of a deadline to react. This tardiness will not be tolerated,” he said, describing the lack of appropriate skills and experience as the root cause of poor decision-making and service delivery failures.
In his earlier address, outgoing IMFO president Chris Nagooroo said that, while progress had been made on meeting the minimum competence requirements, there were still a significant number of practitioners who still did not meet the criteria.
“The implications of this will certainly have to be considered by municipalities and by the National Treasury,” Nagooroo argued.
He added that it had become increasingly urgent to make it compulsory for municipal finance practitioners to become members of a professional institute that could monitor, develop and discipline the professional status of members. The IMFO was in the process of seeking formal recognition from the South African Qualifications Authority to be recognised as a professional institute.
But Gordhan expressed deep frustration with the fact that, instead of addressing the qualification shortfalls, some municipalities had exacerbated the problem by hiring additional unqualified or under-qualified individuals.
“When you have a nail in your foot, you must remove the nail, because you can’t walk properly. But what we do is put more nails in the foot. In other words, we know that hiring people without the right experience and skills is going to debilitate us, but we go ahead and hire more of those people, and debilitate ourselves further.”
There was no shortage of facilities to train people, but rather a “shortage of will to do the right thing”. “There is also a lack of understanding that experience doesn’t come because you receive a certificate. You have got to work hard both for the certificate and for the experience and you have to spend years getting the experience – you are not going to get it overnight,” the Finance Minister stressed.
Poor planning, poor leadership, poor implementation and a failure to hire the right people also lay at the heart of the rise in unauthorised, irregular, fruitless and wasteful expenditure; the failure to collect revenues; and the under-expenditure on capital budgets
During the 2011/12 financial period, fruitless expenditure increased from R4-billion to R15.5-billion, municipalities collectively failed to collect R77-billion owned for services and underspent their capital budgets by around R10-billion. “Surely, this in unacceptable. Surely, this means that all of you need to take a pretty hard look in the mirror,” Gordhan said.
Municipal politicians were also not spared, with Gordhan blaming them for interfering with tenders and failing to crack down on corruption and misdirected expenditure. Councillors could not plead ignorance, as they were governed by a code of conduct outlined in the Municipal Systems Act on which they had all received training in the past year.
Councillor and financial officers had a crucial role in ridding the local government sphere of “this cancer of corruption”.
There had also been too little progress in ensuring compliance with the 2003 Municipal Finance Management Act, which was leading to serious violation of supply-chain management regulations.
“When we look inside municipal finances, there are not enough controls. We pay twice, if not three times, the price, for certain things. We are paying for things that are not actually delivered in the right quantity or quality,” Gordhan lamented.
He said financial management was not only about filling in procurement forms, or “meeting in secret corners with the right people to get the right tenders”. “It’s about ensuring value for money, because the money we spend in municipalities, as in any other sphere of government, is not our money.”
Financial managers had to take responsibility for standing up even at the risk of their jobs to turn this situation around.
Gordhan also showed deep irritation with persistent arguments that more could be delivered if financial resources were increased. “Sometimes . . . it is because we over promise and under deliver and underspend and overspend all at the same time, in the wrong categories.”
He acknowledged that fast-growing cities faced complex and challenging managerial tasks to keep pace with the rising expectations of their expanding populations.
The recent mining strikes had highlighted that municipalities had fallen short in ensuring that workers lived decently. We must be energetic and creative to build the economic potential of municipalities, which should be key sites of investment and job creation.
Government, Gordhan said, was doing everything possible to restore stability and formulate initiatives supportive of a “new form of normality”.