Auditor General’s report reveals financial chaos in Eastern Cape municipalities

Auditor General’s report reveals financial chaos in Eastern Cape municipalities

Eastern Cape municipalities are in financial chaos and are not holding those responsible for financial misconduct to account, despite these individuals placing municipalities, public institutions, and the people they are meant to serve, at risk.

This is why sewage flows in the streets, electricity outages occur, roads disintegrate, and water pumps fail to deliver water to households.

These were the findings of an Auditor General (AG) report presented to the Eastern Cape Legislature earlier this week.

The AG’s report highlights a shocking total of 43 material irregularities in the following areas: Buffalo City Metro, Nelson Mandela Bay Metro, Amahlati LM, Amathole DM, Chris Hani DM, Dr Beyers Naudé LM, Enoch Mgijima LM, Intsika Yethu LM, Inxuba Yethemba LM, King Sabata Dalindyebo LM, Makana LM, Ntabankulu LM, OR Tambo DM, Port St. Johns LM, Raymond Mhlaba LM, Sundays River Valley LM, and Walter Sisulu LM.

The AG highlighted 39 material irregularities related to non-compliance and suspected fraud, resulting in financial losses estimated at a staggering R632.82 million. Three cases were found to have led to substantial harm to public sector institutions and, in one case, substantial harm to the public.

This extensive list underscores the alarming scale of financial mismanagement within our local government institutions.

One of the most distressing cases highlighted in the report is that of Makana Municipality, which received a repeat disclaimed audit opinion. The municipality’s failure to keep proper records of its financial affairs resulted in substantial harm, creating material uncertainty about its ability to continue its operations. This failure threatens the municipality’s ability to fulfil its service delivery mandate, impacting the lives of its residents.

In the Walter Sisulu Municipality, substantial harm was caused by the mismanagement of the Aliwal North landfill site, leading to significant pollution and environmental degradation. The guilty verdict in September 2021, and a suspended fine of R1 million, underscore the severity of the issue.

Shockingly, no actions were taken to address 88% of these matters until the AG issued notifications.

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The DA echoes the AG’s call on the Portfolio Committee for Cooperative Governance and Traditional Affairs (COGTA) and other role players, including Heads of Departments, MECs of coordinating departments, audit committees, and council members, to follow up on accounting officers’ actions to recover and prevent further losses.

Officials must be held accountable for effectively implementing controls over financial reporting, financial management, and compliance with legislation. Moreover, the DA demands effective measures to address material irregularities and financial wastage.

The DA will fight to ensure that these material irregularities do not go unaddressed. The people of the Eastern Cape deserve accountable and responsible governance that puts their well-being first.