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Leaders at under-performing municipalities may get the boot

Pravin Gordhan says they will work with the 50 municipalities given disclaimed audit opinions.

FILE: Minister of Co-operative Governance and Traditional Affairs Pravin Gordhan. Picture: Thomas Holder/EWN

CAPE TOWN Under-performing municipalities could see a change in leadership if they dont soon show improvement.

That warning comes from Co-operative Governance Minister Pravin Gordhan.

Gordhan attended the release on Wednesday of Auditor-General Kimi Makwetus report on local government audit outcomes.

Makwetu said 17 percent of municipalities and municipal entities achieved clean audits in the 2013/2014 financial year.

Thats a significant improvement compared to the nine percent that received clean audits in the previous year.

Gordhan said together with Treasury and the South African Local Government Association (Salga), they will work with the 50 municipalities given disclaimed audit opinions, especially the 25 councils that have had disclaimed reports for the past five years.

If need be we will refer some municipalities to the relevant political parties to consider a change in the leadership of these municipalities if there is no immediate improvement.

The Western Cape, Gauteng and KwaZulu-Natal are the top performing provinces when it comes to municipal finances.

While these three provinces have the cleanest audits, the Eastern Cape, Mpumalanga, and the Northern Cape showed some improvement.

The Auditor-General said financial controls in reporting remain poor in the Free State, Limpopo and North West, where not a single clean audit was achieved.

MUNICIPALITY IMPROVING

Makwetu said more municipalities are managing to balance their books.

He said the trend is encouraging but that most of the improvements been from a low base.

So there still is a gap with regard to gearing up on the disciplines of financial management skills as well as strengthening the daily control disciplines in local government.

Makwetu said irregular expenditure totalled just over R11 billion, down from R12 billion the previous year, but still unacceptably high.

And he said a number of municipalities are at financial risk because they cant collect money owed to them for services.