Municipalities' irregular expenditure up by R7bn, now sitting at R32bn - Makwetu

This has been attributed to departures from prescribed regulations a problem that has hogged municipal finances for some time.

FILE: Auditor-General Kimi Makwetu. Picture: GCIS

JOHANNESBURG - Auditor-General Kimi Makwetu on Wednesday said irregular expenditure among municipalities in the country had increased to R32 billion in the 2018/2019 financial year, up by R7 billion from last year.

This has been attributed to departures from prescribed regulations; a problem that has hogged municipal finances for some time.

Makwetu was releasing the consolidated local government audit reports at a briefing Pretoria on Wednesday.

“The discrepancies, as well as the departure from the prescribed regulations that govern the procurement of goods and services, has not been fixed. Many continue to extend contracts without following the correct due processes. Many, even in municipal account public offices, tend to want to condone irregular expenditure from previous years.”

The number of municipalities with clean audits stands at 8%, which represents 20 municipalities predominantly in the Western Cape and Gauteng.

Municipalities’ ability to deliver reliable to services are dwindling in most provinces – with the Makwethu saying this was due to lack of adherence with fiscal management laws.

The Auditor General rightfully terms the consolidated local government audit reports as, “not much to go around, yet not in the right hands”.

Makwethu acknowledged during his delivery of the report that local government has not had enough resources to fulfil its mandate.

However, what then leads to the problems experienced at this sphere of government with direct impact on the quality of citizens’ lives is that the little resources in the sector are not being managed properly.

Collectively, the country’s municipal revenue amounts to R226 billion with an additional R55 billion collected in equitable share and another R43 billion from conditional grants.

However, municipalities admit that they cannot recover about 60% of their revenue with the remaining 40% and 166% of the equitable share allocated to salaries and wages.

The report shows that there is a growing trend demonstrating established businesses and households’ diminishing ability to pay for municipal services.

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