While the achievements of local government over the last 20 years are evident and worth celebrating, the challenges are as equally evident. Managing resources efficiently is one of the key elements of good governance and local government has, over the years, performed poorly in this regard. The audit outcomes of the 2017-2018 and 2018-2019 financial years paint a picture of a local government system that is regressing in audit performance as opposed to improving. This is indicative of poor governance, weak financial control systems and finance management as well as poor oversight.
In his report on the 2018-2019 local government audit outcomes, Auditor-General (AG) Kimi Makwetu notes that: “when looking across the board and after carefully analyzing the financial statements audited, we can safely conclude that local government does have sufficient money and assets to fulfill most of the basic needs and aspirations of its citizens.”
Makwetu also paints an undesirable picture of billions of rands in funds allocated to municipalities being managed “in ways that are contrary to the prescripts and recognized accounting disciplines”. He strongly cautions that these administrative and governance lapses “make for very weak accountability and the consequent exposure to abuse of the public purse”. The AG released the 2018-19 municipal audit results under the theme – “not much to go around, yet not the right hands at the till”.
The Office of the Auditor-General flags a lack of accountability as the major cause of poor local government audit results. This undesirable state of deteriorating audit outcomes shows that various local government role players have been slow in implementing, and in many instances even disregarded the audit office’s recommendations. As a result, the accountability for financial and performance management continues to worsen in most municipalities.
Clearly, the problem of local government is not that it does not have money to meet the service delivery needs of its citizens, but that it allows for a fertile ground for mismanagement of the money it has. The Auditor-General’s 2018-19 Report is forcing civil society to rethink municipal oversight, as such requiring civil society be mobilized to craft a response to the Office of the Auditor-General.
KEY FINDINGS FROM THE REPORT
- Most municipalities are “crippled by debt and being unable to pay for water and electricity; inaccurate and lackluster revenue collection; expenditure that is unauthorized, irregular, fruitless and wasteful; and a high dependence on grants and assistance from national government”.
- Audit outcomes regressed – 76 municipalities regressed and 31 improved.
- Poor quality of financial statements – inaccuracies.
- Lack of credibility of annual reports.
- Inability to collect debt from consumers of municipal services.
- Deterioration of financial health of municipalities – 79% have problems.
- Average creditor payment period = 180 days.
- R32bn irregular expenditure.
- Poor governance – non-compliance with legislation.
- Underspending of capital budgets – poor maintenance of infrastructure.
MOBILIZING CIVIL SOCIETY
On the 16 September 2020, Afesis-corplan and the Democracy Development Programme (DDP) hosted a webinar with 39 civil society organizations and social movements to explore what needs to change to make municipal oversight work in South Africa. During this webinar, a consensus was reached that civil society needs to take a more involved and central role in tackling the myriad problems faced by the local government sphere. One of these roles included engaging the Auditor-General (AG), South African Local Government Association (SALGA) and the Department of Cooperative Governance (COGTA), amongst others, to help craft both practical and legislative solutions to some of the problems plaguing local government. What was flagged as a short-term goal was engaging the AG’s report and drafting a co-signed civil society response/campaign.
As part of this campaign, civil society organizations working within the local government sector and others concerned with the state of local government convened on the 29 October 2020 to participate in a joint virtual press briefing to present their collective reflections and recommendations to the AG’s 2018-2019 Report.
The changes required in local government need systemic and legislative modifications in order to insulate local government from the kind of political interference it has endured and the disruptive results thereof. The situation is even more urgent in light of the Covid-19 pandemic, where the need for stronger municipal structures has been highlighted.
2018/19 MEDIA COVERAGE
- CAPE TALK – Civil society’s response to AG report radio interview with DDP Executive Director Dr. Paul Kariuki
- DAILY DISPATCH – Local government chaos must end, say civil society organisation
- THE HERALD – Tender system too easy to manipulate
- CAPE ARGUS – End to cadre deployment urged
- IOL – Civil society gives government some guidelines to improve service delivery