Consultants a R3 billion joke
Municipalities spent more than R3.3-billion of taxpayers' money on consultants - some of whose work needed significant correction by the office of the auditor-general. Chief auditor Kimi Makwetu yesterday said many of the consultants produced sloppy, flawed work.Between July 2014 and June 2015 - the audit period under review - municipalities spent R3.372-billion on consultancy services.Said the AG's office: "We found that at 105 municipalities, the financial statements submitted for auditing included material misstatements in the areas in which consultants work, which meant the misstatements were identified and corrected by the audit process and not by the consultant."This remains a concern regarding the effective use of these consultants."Of the 250 municipalities found to have used consultants, the office of the AG found that:93 did not properly define measures to monitor contract performance and delivery;43 failed to put measures in place to detect under-performance by consultants;No evaluation was performed at 48 municipalities to determine whether consultancy services met initial project objectives;About 68 municipalities did not insist on skills transfer as a prerequisite for awarding work to consultants; andAbout 106 municipalities could not provide proof that the use of consultants resulted in skills transfer for their staff.While costs related to the use of consultants rose alarmingly between 2010 and 2015, it is the sharp increase in the use of consultants for financial reporting services - from R267-million in the 2010-2011 financial year to R892-million in the period under review - that has Makwetu particularly worried.Among others, municipalities spent R615-million on consultants for IT services, R43-million for preparation of performance information and R1.822-billion for "other services".In his report, the AG notes that the increase in the use of consultants rose significantly in the 2012-2013 financial year after "poor audit outcomes and the vacancies and inexperience of officials in key positions in the post-election year".He added: "The increased cost can be attributed to consultants increasingly being appointed to clean up the accounting reports before preparation of the financial statements. As a result, the average cost per municipality has more than doubled since 2010-2011, from R1.4-million to R3.5-million."..
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