Billions lost in Local Government

The substantive increase in irregular expenditure by 75%, from R16,2bn to R28,3bn within local government can only be described as a disgraceful lack of leadership and governance by those in power at all levels of Government. The sad reality is that poor performance at municipal level impacts negatively on our daily lives through failed service delivery and infrastructure development, with the poor generally bearing the brunt.

Three Provinces (Limpopo, Free State and North West) received zero clean audits from their municipalities, which is indicative of an outright failure of the oversight structures at local and provincial level, along with the failure by the Cooperative Governance and Traditional Affairs department (CoGTA) at the national level, to hold these municipalities to account.

It is unacceptable that only 13 municipalities received clean audits. The total local government expenditure budget for 2016-17 was R362bn representing R25,68 billion or 7% of local government’s budget.

Year after year the problem of declining municipal governance gets worse and despite the warnings given by the Auditor General of South Africa (AG), along with the promises made by Government to address the rot, very little is being done to stem the tide of corruption and gross maladministration throughout most towns and cities in South Africa.

“As far as we are concerned, the lack of accountability by those in leadership is the real issue,” says Michael Holenstein, Manager of OUTA’s Local Government Initiative. “We cannot continue to allow these serious issues to go unchecked. It is now high time that people are held accountable and serve time in jail if need be.”

Of the 257 municipalities, 45 regressed while only 16 improved. This is on the back of continuous decline for a number of years, signalling that Government has lost control of corruption and maladministration at Local Government levels.

While the lack of accountability is the overarching problem, the decline in performance is also linked to inappropriate internal controls and poor financial performance management.  The rule of law is also not being respected along with the necessary public engagement requirements and the roll-out of their approved Integrated Development Plans (IDPs).

Provincial MEC’s have also failed to ensure that Financial Recovery Plans are drafted and adhered to, which is a criminal offence. In addition, the failure to investigate findings on supply chain mismanagement and fraud or improper conduct is the responsibility of Local and Provincial Government leadership.

In OUTA’s work in addressing these matters at Local Government, we see evidence of political interference from leadership within Provinces who are participating in corrupt activities, or allowing criminal conduct of fraud and corruption to continue unabated at local levels.

We call on Minister Zweli Mkhize to take action and charge those in authority for the breakdown in governance. His decisiveness will boost South Africa’s belief in the new dawn.