The 2022-23 consolidated general report on local government audit outcomes shows that while the Eastern Cape’s audit outcomes have improved slightly, a culture of unaccountability is undermining these improvements.
In the report, Auditor-General Tsakani Maluleke highlighted the ongoing and severe financial mismanagement plaguing municipalities across the Eastern Cape. Most municipalities have failed to collect the money owed to them for the services they provided, and in 30 municipalities, more than 50% of the outstanding debt was not recoverable. This not only exacerbates the already strained government finances but also threatens the sustainability of these municipalities.
When municipalities falter, essential services like water supply, sanitation, and electricity become unreliable or unavailable. This creates a ripple effect, where local businesses struggle to operate, schools face closures, and healthcare facilities become compromised. The resulting decline in living standards, coupled with the economic strain, affects everyone in the community.
The AG report indicates a slight decrease in the number of municipalities disclosing significant doubt about their ability to continue operating, from 11 municipalities (28%) last year to nine municipalities (23%) this year.
However, it is deeply concerning that seven municipalities, including five with doubts about their operational viability, have adopted unfunded budgets for the financial year. This clearly shows financial irresponsibility and a disregard for sustainable governance.
Since the AG’s office implemented the material irregularity process, 50 material irregularities for financial loss and substantial harm have been identified in the province, with a staggering combined estimated financial loss of R764,19 million. While some progress has been made in resolving these irregularities, with R46,27 million recovered, unresolved cases remain unacceptably high. This further underscores the critical need for stronger accountability and oversight mechanisms.
The provincial coordinating institutions, including the premier’s office, treasury, and cooperative governance department, have struggled to support these municipalities effectively. Shockingly, only one of the 11 dysfunctional municipalities has prepared and adopted a municipal system intervention plan, which has yet to be implemented. Furthermore, despite ten municipalities having financial recovery plans in place, their councils have failed to properly implement these initiatives.
It is imperative that the provincial treasury and COGTA prioritise building capacity within municipalities, ensuring that initiatives are tailored to each municipality’s specific needs, executed promptly, and regularly assessed. Political leadership must also ensure stability in senior management and other key positions to strengthen municipal governance.
Given these alarming findings, I will write to the Chairperson of the COGTA Portfolio Committee, Nomasikizi Konza, requesting that the municipal managers and mayors of the respective municipalities be called to account before the committee. They must provide clear explanations for the poor performance and outline concrete steps to rectify these issues.
The provincial legislature must also take a more proactive role in ensuring that audit findings and proposed remedial actions are not only tabled but followed up with resolutions and prompt action.
It is time for decisive leadership and accountability in our municipalities to safeguard the financial health and service delivery that our communities rely on.