Material irregularities, suspected fraud result in municipal losses of over R7bn for 2022/2023, reveals AG

CAPE TOWN - Material irregularities and suspected fraud at municipalities have resulted in losses of more than R7 billion in the last financial year.

Auditor General (AG) Tsakani Maluleke says the work of her office has led to the prevention of losses of almost R1 billion - some of which is still in the process of recovery.

Maluleke on Tuesday tabled a bleak picture of the state of the country’s 257 municipalities - saying a culture shift to ethical leadership is sorely needed.

She noted that it is not the job of her office to be an accounting officers, explaining that it aims to use its powers to compel them to be better at complying with the law.

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"We also highlight that we’ve got to push back on the culture of poor accountability and poor consequence management. "

Maluleke says the office has prevented losses of over R200 million and recovered a further R260-million as a result of the 360 material irregularities identified during the 2022/23 audits.

A further R444-million in financial losses incurred by municipalities is in the process of being recovered.

Since the AG’s office was empowered to act against accounting officers through amendments to the law five years ago - Maluleke says it’s led to improved action on irregular expenditure.

"We cannot rely solely on these material irregularity powers to get local government operating on its mandate and with efficiency. It’s imperative that we worry about the people running municipalities to do so properly."

Maluleke says while her office has contemplated it - it has not yet reached the point of issuing a certificate of debt against an accounting officer.