The good‚ the bad and the ugly – the Auditor-General’s report card on spending by municipalities

The Auditor-General has laid bare the financial performance of municipalities for the financial year 2015/16‚ revealing the good‚ the bad and the ugly.

City of Tshwane metro‚ in Gauteng‚ tops the list of the highest contributors to unauthorised expenditure‚ blowing R1.914-billion‚ from R786-million in 2014/15.

The Auditor-General's report on local government audit outcomes released in Pretoria on Monday revealed that overspending‚ 43% of which was related to non-cash items‚ was the main source of the expenditure.

Susan Booysen‚ a Professor at the Wits University School of Governance‚ said unauthorised expenditure was incurred due to unbudgeted-for events like natural disasters‚ fires and storms.

She however said the period under review – 2015/16 - was when the ruling party was campaigning for local elections‚ so funds could have been diverted into showing people that government was working.

“To make an impression on voters that they are working but in general it is a serious concern and the national government has not been leading by example‚” she said.

According to the A-G's report‚ the expenditure in Tshwane could mainly be attributed to employee-related costs‚ debt impairment‚ depreciation‚ finance charges‚ bulk purchases‚ contracted services‚ transfers and grants‚ losses on the disposal of property and plant equipment.

In February‚ Tshwane mayor Solly Msimanga said a major factor in the finances of the metro‚ which they wrested from the ANC‚ was the uncertainty regarding the outcome and financial impact of a number of legal cases in which the municipality 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‚ with the potential liability estimated to be in excess of R226-million.

Tshwane mayoral spokesperson‚ Samkelo Mgobozi‚ said they did expect the unauthorised expenditure figure to be around R1.8-billion but said they have not seen the report.

“We have to get the report and be able to comment‚” he said.

The City of Tshwane‚ Polokwane and Ngaka Modiri Molema have incurred unauthorised expenditure for the past five years.

Irregular expenditure in municipalities increased by more than 50%‚ racking up a R16.81-billion bill.

OR Tambo district in the Eastern Cape‚ was responsible for the biggest portion of this figure with R1.569-billion‚ from R94-million in 2014/15 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 2014/15.

The A-G noted that there was a significant decrease in the amount of unauthorised expenditure incurred by municipalities in the Western Cape (65)%‚ the Eastern Cape (41%) and North West (30%).

The report also reveals how suppliers owned or managed by municipal employees made false declarations in the awarding of R1.9-million at 110 municipalities‚ whilst suppliers owned by relatives of officials made false declarations in the awarding of R454-million contracts at 29 municipalities.

At 24 municipalities‚ employees failed to declare their own interests in awards of R23-million in contracts either as part of the procurement processes or through annual declarations.

At 46 municipalities‚ employees failed to declare their family members' interests in awards to the tune of R806-million.

- TimesLIVE