Parliament, Tuesday, 22 June 2021 – A joint meeting of the Standing Committee on the Auditor-General and the Standing Committee on Public Accounts (Scopa) were briefed by the Auditor-General (AG) today on the 2019/20 Municipal Finance Management Act (MFMA) audit outcomes and on the Covid-19 municipal expenditure.
The joint committee heard from the AG that the financial health of local government continues to worsen with serious weaknesses in financial reporting. The current annual irregular expenditure incurred by 246 municipalities is R26 billion, which came about as a result of non-compliance with legislation. There are 22 municipalities with disclaimed opinions in the year under review. The use of consultants continues to be a problem in municipalties, as they provide a short-term expensive solution to address the capacity and skills problem. The AG has found a reccuring use of consultants at 74% of the municipalities. Some of these consultants have caused further damage to the financial health of municipalities instead of assisting.
The committees have also emphasised the need for law enforcement agencies to follow up on the issues identified by the AG. The AG found a number of cases of employees awarding tenders to family members for Covid-19 procurement. The committees believe that fraud and corruption cases found in municipalities should be made a priority as this will assist in driving the desired change in municipalities. The committees will request the responsible law enforcement agencies to give a report on the progress of cases identified by the AG in an effort to assist the office of the AG.
In response to the request of the AG to ensure that there is ethical leadership that is free from political interference in municipalities, the committees believe there should be an interaction with political parties responsible for these municipalities. Political leadership is a key and intergral stakeholder in the management of these municipalities.
From previous oversight visits and interactions, Members of Parlaiment have observed that there is a failure to separate municipalities from the political party. It’s an area that has not been looked at and might be an oversight on the part of public represantatives. This interaction could assist in drawing attention to the impact this has on financial management.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE STANDING COMMITTEE ON THE AUDITOR-GENERAL, MR SAKHUMZI SOMYO AND THE CHAIRPERSON OF SCOPA, MR MKHULEKO HLENGWA.
For media enquiries, please contact the committees’ Media Officer:
Name: Ms Faith Ndenze
Parliamentary Communication Services
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Email: fndenze@parliament.gov.za
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