Auditor-general Tsakani Maluleke has highlighted instability in management of many municipalities as one of the factors that constantly contributes to their poor annual audit outcomes.
She was speaking yesterday at a breakfast session hosted by the National Press Club in Pretoria, where she talked about the work done by her office in the last five years.
She expressed concern about recurring poor audit outcomes incurred by many municipalities, attributing the results in part to instability in management positions.
According to her, there is a correlation between the tenure in office of a municipal manager and chief financial officer and the audit outcomes achieved by respective municipalities.
Maluleke said municipalities with disclaimers were often the ones where a municipal manager is either there for six months or a year.
“That level of instability destroys institutional capacity,”she said.
She mentioned that it takes a while for managers to build a team, put in place the standard operating procedures, controls and disciplines that make effective financial management.
The non-compliance with legal prescripts regulating procurement processes was also highlighted as one of the problems constantly confronting the municipalities and other public institutions.
For example, Maluleke said, the Department of Health in KwaZulu-Natal was flagged for spending more money on sanitisers out of keeping with specific price levels established by the National Treasury.
She said much of the procurement issues often lead to projects being delayed and abandoned projects, including poor quality of work.
“If you are in the habit of flouting procurement processes and there’s a culture of tolerating the culture of flouting procurement processes the risk is very high that you will end up appointing the type of contractors that are not going to be able to deliver work,” she said.
Maluleke talked about a project where the Gauteng Department of Infrastructure Development spent an amount of R490 million to refurbish a privately owned hospital on behalf of the provincial department of health.
“That should never have happened because that was the property that was never owned by the government. Fortunately the SIU (Special Investigating Unit) is now working on it,” she said.
Some of the issues raised by the AG related to municipalities not managing their cash flow properly and ending up paying penalties to creditors such as Eskom.
The payment of penalties, she said, were flagged as wasteful expenditures.
In some instances, she said, municipalities ended up making payment arrangements with creditors for residents to continue having access to services such as water and electricity.
Pretoria News
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