Most councils fail audit test

Of the 278 municipalities nationwide, only seven have been given clean audit reports by the auditor-general - but that is an improvement on last year.

The consolidated report of auditor-general Terrence Nombembe on the 2009-2010 local government audit painted a bleak picture of financial mismanagement in almost all municipalities.

Among the cleanest municipalities were three in Mpumalanga, and one each in Gauteng, Northern Cape and Limpopo.

The DA-run Cape Town was the only metro to be given an unqualified audit.

The seven worst, which all received adverse opinions, included Indaka, in KwaZulu-Natal; the Western Cape's Kannaland and George; Eastern Cape's Ntabankulu, Inkwanca, and Sakhisizwe, and Letsemeng, in the Free State.

The auditor-general expresses an "adverse opinion" - the worst opinion he can give - when he finds a municipality's books to be in a shambles.

Nombembe could not finalise the audit for Johannesburg because it had not submitted its paperwork on time, and Tshwane, Ekurhuleni, Ethekwini and Nelson Mandela Bay received reports that mentioned concerns about non-compliance, useless and unreliable audit information, and late submissions of data.

Among the municipalities with clean audits were Ehlanzeni, which oversees Nelspruit, Barberton and Bushbuckridge, and Kimberley's Frances Baard.

Nombembe said he was pleased that 57 municipalities improved their performance, 26 of which moved to unqualified results from results accompanied by disclaimers.

Notable improvements were in KwaZulu-Natal, Gauteng and Western Cape.

But Nombembe said he was disturbed that 110 of 163 municipalities, or 67%, failed to do better.

Unauthorised expenditure of R5-billion was incurred by 112 municipalities and their business entities, compared to R2.7-billion by 101 municipalities in the previous year.

Municipalities in Gauteng accounted for 33% (R1.7-billion) of the unauthorised expenditure, with Tshwane responsible for R1.5-billion.

KwaZulu-Natal had the biggest increase in irregular spending, from R171-million last year to more than R1-billion. Municipalities in the Eastern Cape increased irregular spending from R288-million to R813-million, and those in Western Cape from R89-million last year to R529-million.

In Gauteng, irregular expenditure increased from R203-million to R660-million.

Gauteng municipalities blew about R2-million in "fruitless and wasteful expenditure" in 2008-2009, and R20-million in 2009-2010.

In Eastern Cape. wasteful spending rose from R10-million to R27-million, in the Free State from R57-million to R83-million, in KwaZulu-Natal from R2-million to R17-million, in Mpumalanga from R15-million to R19-million, and in Northern Cape from R3-million to R8-million.

North West wasted less money than in the previous year, from R10-million to R5-million, as did Western Cape (from R9-million to R3-million) and Limpopo (from R21-million to R7-million).