Parliament, Tuesday, 16 July 2019 – A joint meeting of the Standing Committee on Public Accounts (Scopa) and the Standing Committee on the Auditor-General (SCOAG) has expressed that it wants to see the enforcement of the expanded mandate of the Auditor-General. According to the amended Public Audit Act, the Auditor-General has the powers to go after officials who transgress legislation such as the Public Finance Management Act (PFMA) and the Municipal Finance Management Act (MFMA).
The committees have also requested the Office of the Auditor-General to send through a list of the 17 municipalities which are repeat offenders and the age analysis. This is in order for the committees to start the process of scheduling hearings with those municipalities. The committees have also requested the Office of the Auditor-General to submit the list of the nine municipalities that have outstanding audits to date.
The joint meeting was today briefed by the Office of the Auditor-General on the Municipal Audit Outcomes for the 2017/18 financial year. The committees were told that irregular expenditure in municipalities remains very high and is currently at R71 billion. This is due mainly to the fact that irregular expenditure is not being addressed year by year by municipalities. The committees were also informed that all provinces have deteriorated in key compliance with legislation, supply chain management, as well as in effecting consequences.
The joint meeting raised concerns about municipalities that are still spending a lot of money on consultants who do the basics. The Office of the Auditor-General has informed the committees that 197 municipalities use consultants on their finances and R9.7 million has been spent on such consultants, while some of those municipalities have submitted poor financial statements. Another concern is the lack of skills transfer from these consultants to the staff of the municipalities. The committees have requested the Office of the Auditor-General to send through a breakdown on all municipalities that have used consultants and still submitted poor financial statements.
The committees have also requested the Office of the Auditor-General to send the list of municipalities where they received threats and the details of the cases that have been opened in this regard, so that the committees can assist the Office of the Auditor-General by following up with law enforcement agencies on the progress of these cases.
The committees have also raised concerns about the matter of the VBS Mutual Bank investments that impacted 16 municipalities in the Gauteng, Limpopo and North West provinces. The Office of the Auditor-General has stated that the MFMA prohibits municipalities from investing in mutual banks. Two municipalities were able to withdraw their investments in time but 14 municipalities still had those investments when the VBS Mutual Bank was placed under curatorship. The committees enquired from the Office of the Auditor-General whether it has raised these issues with municipalities in their month-on-month or quarter-to-quarter intervention meetings.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSONS OF SCOPA AND SCOAG, MR MKHULEKO HLENGWA AND MR SAKHUMZI SOMYO.
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