Municipalities that use consultants to prepare financial statements not getting long-term value for money - AG Maluleke

CAPE TOWN - Auditor-General Tsakani Maluleke said that municipalities using consultants to prepare their financial statements were not getting long-term value for money. 

She said municipalities would not even need to employ them if financial officers were up to the task. 

Tabling the 2022/23 audit outcomes for municipalities in Parliament on Wednesday, Maluleke revealed the expenditure of R1.3 billion on consultants.

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Although there’s been a R300 million drop in expenditure on consultants over the last financial year, the Auditor-General said it was still too high. 

The highest expenditure was raked up by Limpopo municipalities at more than R279 million, followed by KwaZulu-Natal and the North West. 

"The municipalities with clean audits still use consultants but to a much lesser extent, they use them for specific technical issues. The ones that overrely and spend the greatest amounts of money are the ones with disclaimer audit opinions, the adverse and the qualified."

Maluleke said the heavy reliance on consultants indicated a lack of skills, discipline and consequences for those employed by municipalities to manage their finances.

"The support that’s offered will always have a very short-term benefit in that at least audit outcomes look better, but then underneath it, we are not building the capacity that municipalities require to run their affairs."

The Western Cape only spent R41 million on consultants but achieved the most clean audits for 26 out of 34 country wide.