The South African Local Government Association (Salga) has reiterated its call for action to be taken against municipalities that do not comply with audit outcomes, stating that municipalities that have irregular outcomes should face consequences.
The latest municipal audit outcomes of local government for the 2015/16 year, which were released by Auditor-General (AG) Kimi Makwetu on Wednesday, highlighted a 50% rise in municipalities’ irregular expenditure, or spending outside the prescripts of the law, to R16.81-billion.
“We believe the AG’s report is a key indicator of the state of local government and the information and insight presented in the report is aimed at empowering oversight structures, as well as leaders in local government, to focus on issues that will result in reliable financial statements,” Salga board member Simphiwe Dzengwa said on Thursday.
Addressing delegates in Johannesburg, he pointed out that only 16 auditees had received unqualified or “clean audit” opinions.
Municipalities in KwaZulu-Natal, Gauteng and the Western Cape represented the bulk of the positive audit outcomes. The Eastern Cape and Limpopo had also made some significant improvements in the 2015/16 audit cycle.
“If this trajectory can be maintained or even enhanced without significant regressions, then the audit outcomes during the next term of local government could be even more positive.”
Dzengwa added that, despite persisting challenges, Salga’s various measures of support were bearing fruit.
He noted that Salga’s Municipal Audit Support Programme, together with other support initiatives, had played a significant role in the positive trajectory achieved in audit outcomes over the last term.
“All support initiatives need to focus on [sustaining] improvements, because in the current audit outcomes, a number of auditees that had improved in the prior year regressed [again],” Dzengwa said.
He added that while there were a large number of improvements by municipalities in 2015/16, the regression in performance by some municipalities was not ideal.
Dzengwa noted that Salga was concerned about the accountability of resources allocated in terms of value for money and quality of expenditure, as well as spending results.
He stated that the association was currently focused on helping to build viable and resilient municipalities that were financially healthy, had increased accountability and better leadership, and that improved service delivery and responsiveness to communities.
“Despite lingering challenges, the AG’s report shows a trend where local government has been building the requisite capacities to discharge its obligations, notwithstanding the very real limitations and capacity weaknesses still evident,” Dzengwa said.
He further pointed out that local government was owed R118-billion by the State, businesses and households, which weakened local government’s ability to deliver better services.
“We have made a call for drastic action to be taken [to ensure] national and provincial government pays [what is owed to local government].”