Failing KZN municipalities warned not to expect bonuses, increases

There will be no bonuses or salary increases for employees at municipalities that perform poorly in KwaZulu-Natal.

This is the reality facing errant provincial municipalities‚ in line with the KZN cooperative governance and traditional affairs department’s “Operation Bounce Back” campaign.

This stern warning was issued by KZN cooperative governance and traditional affairs MEC Nomusa Dube-Ncube during a media briefing in Durban on Wednesday. She was speaking following municipal audit outcomes from Auditor-General Kimi Makwethu’s national municipal audit report for the 2016/17 financial year.

Makwethu painted a bleak picture of the financial situation of municipalities in the country‚ with his report revealing that the expenditure budget for the municipal sphere in the 2016/17 was R362.13-billion.

It also showed that municipalities with clean audit opinions represented just R25.68-billion (7%) of this amount‚ while those with unqualified opinions with findings represented R243.82-billion.

Municipalities with qualified audit opinions made up R61.14-billion (17%) of the total budget‚ while those with adverse and disclaimed opinions represented R22.81-billion (6%). Municipalities with outstanding audits constituted R8.68-billion (2%) of the total budget.

But Dube-Ncube said that despite an overall regression‚ KZN had retained its position as the second best-performing province in the country.

“As a provincial government department whose mandate is to support municipalities‚ we have wasted no time in responding to these audit outcomes. We have engaged with every one of our poorly performing municipalities on a one-on-one basis and we have launched Operation Bounce Back to ensure that all municipalities come up with well-rounded audit response plans that will form the basis for improved audits in 2017/2018 and beyond.”

Operation Bounce Back is a multi-pronged strategy to reverse the latest audit regression in the province’s 54 municipalities. It places a premium on consequence management by penalising poor performance.

Dube-Ncube said they have also introduced a new way of doing things with municipalities‚ which includes “not paying bonuses and salary increases to poorly performing municipal employees. We are applying consequence management and‚ as a result‚ we will bounce back”.

However‚ it emerged that two unidentified poorly performing municipalities had already paid performance bonuses to their employees. Now the department is engaging with them on how to recover the monies.

“We have asked them how they are going to recover those monies. We are also looking at contracts of those municipalities as well as the reasons why the performance bonuses were paid‚” said Dube-Ncube.

In the 2016/2017 financial year‚ KZN municipalities received seven unqualified audits with no other findings‚ 33 unqualified audits with findings‚ 10 qualified audits‚ two adverse audit opinions and two audit disclaimers.

The main audit challenges included flawed procurement processes and general non-compliance with various aspects of financial governance.