Eastern Cape municipalities get worst audit outcome in six years

Issued by Retief Odendaal, MPL
Shadow MEC for Finance

Urgent interventions are needed to get the financial affairs of municipalities in the Eastern Cape back on track, after the Auditor General revealed that the province’s 2018/19 financial year has had the worst audit results in the past six years.

The latest findings clearly show that local municipalities simply do not have the capacity to manage their own finances, and urgent intervention from the provincial government is needed, if we are to prevent the total collapse of service delivery at local level.

During the latest year under review, the Auditor General gave eight municipalities disclaimers, as the information provided was not sufficient to reach conclusive findings. This is the worst performance by Eastern Cape municipalities since 2012 and stands in stark contrast to last years’ results where only three municipalities received disclaimers.

In addition, the number of unqualified audits awarded to Eastern Cape Municipalities have regressed to 16, three down from 19 last year.

See: IQP 33 Question 815 plus schedule

The most common issues identified by the AG related to irregular expenditure, problems relating to property, plant and equipment asset registers and the understating or overstatement or management of payment receivables, expenditure, revenue and accruals.

COGTA and Provincial Treasury have joint support programmes in place to assist municipalities struggling with audit related matters, but it is clear that these are not delivering the desired outcomes.

I have therefore written to the MEC of Finance, Mlungisi Mvoko, to request the full details relating to the support that is currently being provided to these struggling municipalities, insofar as audit related matters are concerned.

I have also suggested that a dedicated provincial treasury official must be seconded to each of the municipalities that received disclaimers during the financial year under review, to assist these municipalities with their finances.

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If local government fails, service delivery in this province will grind to a halt. This cannot be allowed to happen, and the Democratic Alliance will continue fighting to ensure that public funds are spent wisely, with the focus on providing services to all.

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