Councils blow R17bn in wasteful spending

The auditor-general has laid bare the dismal financial performance of most municipalities in the 2015-2016 financial year, naming and shaming the worst offenders.

City of Tshwane tops the list of local authorities splurging public money on unauthorised expenditure.

It blew R1.914-billion in 2015-2016, up from R786-million the previous year.

Audits showed that local government overspending, 43% of which was related to non-cash items, was the main cause of the unauthorised expenditure.

Susan Booysen, at the Wits University School of Governance, said unauthorised expenditure was often incurred because events such as natural disasters, fires and storms could not be budgeted for.

She said that as the period under review was when the ANC was campaigning for the local government elections funds could have been diverted into showing people that "the government is working".

"It is a serious concern and the government has not been leading by example," she said.

According to the auditor-general's report, most of Tshwane's expenditure was on em-ployee-related costs, debt impairment, depreciation, finance charges, bulk purchases, contracted services, transfers and grants, and losses on the disposal of property and equipment.

Tshwane mayor Solly Msimanga said in February that the major factor in the finances of the metro was uncertainty about the outcome and financial impact of a number of lawsuits in which the council was a defendant.

He said these included a large number of labour or employment cases relating to suspensions and unfair dismissals, expropriations and breaches of contracts. The potential liability is estimated at R226-million.

Tshwane mayoral spokesman Samkelo Mgobozi said the city council had expected unauthorised expenditure to come in at about R1.8-billion.

Irregular expenditure in municipalities across South Africa increased by more than 50%, racking up a R16.81-billion bill, according to the report.

OR Tambo district, in the Eastern Cape, contributed the most at R1.569-billion, up from R94-million in the 2014-2015 financial year.

It is followed by the Nelson Mandela Bay metro, also in the Eastern Cape, at R1.286-billion, a decrease from R1.348-billion in 2014-2015.

The auditor-general noted that there was a significant decrease in the unauthorised expenditure incurred by councils in the Western Cape (65)%, Eastern Cape (41%) and North West (30%).

The report also revealed that suppliers owned or managed by municipal employees made false declarations in the awarding of R1.9-million at 110 municipalities, while suppliers owned by relatives of officials made false declarations in the awarding of R454-million contracts at 29 municipalities.

Employees failed to declare their own interests in awards of R23-million in contracts at 24 municipalities across the country.