Shock at unexplained billions spent by SA councils


South Africa's Auditor General (AG) Tsakani Maluleke

JOHANNESBURG, (CAJ News) – THE Southern African Institute of Government Auditors (SAIGA) has expressed shock at the irregular expenditure at South Africa’s local government level reaching R26 billion (US$1,8 billion) in the 2019–20 financial year.

Auditor General (AG) Tsakani Maluleke released the Municipal Finance Management Act (MFMA) 2019–20 report on Wednesday, which reflected a lack of accountability in the municipalities.

Philip Rakgwale, the SAIGA president, said the irregular expenditure could have been prevented with proper financial systems and controls in municipalities.

“As SAIGA we remain resolute in the stance that our public structures must maintain a low tolerance for financial transgressions or transgressions of any kind as that ensures a smoother running of the country in all respects,” he said.

“It is crucial to note that there is a need for proper financial systems and controls in our local government. Irregular expenditure can be minimised with proper skills and competencies in the structures of our local government.”

The AG reported the municipalities’ performance reporting was worse than their financial reporting.

Due to lack of required documentation from municipalities, the AG was unable to audit contracts worth R1,43 billion.

The AG also observed that municipalities did not implement consequence management, hence the cumulative amount of irregular expenditure not dealt with, stood at R79,22 billion at the year-end.

A total of 72 percent municipalities submitted poor quality financial statements for auditing, raising accountability and transparency concerns.

Municipalities in North West, Free State and Limpopo submitted the poorest quality financial statements.

Russel Morena, SAIGA Chief Executive Office, proposed a growing need for ethical and accountable leaders in the local government and other areas of the state.

“As the primary representatives of Registered Government Auditor professionals in the public sector, SAIGA develops and maintains diligent and ethical public sector officials and thereby promoting clean governance,” Morena said.

– CAJ News



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