Ekurhuleni finance MMC accused of violating Municipal Finance Management Act

Ekurhuleni finance MMC Nkululeko Dunga has been accused of failing to submit the city's 2022/2023 annual financial statements within the legislated deadline, which is in breach of the Municipal Finance Management Act (MFMA).

In terms of the MFMA, all municipalities must prepare consolidated annual financial statements and submit them to the auditor-general (AG) for auditing within three months of the financial year end [end-September].

Also in terms of the act, the mayor must, within seven months after the end of financial year, table in the municipal council the annual report of the municipality at the end of January, which the council must consider by no later than two months from the date on which annual report was tabled in council (end-March).

All but one of the requirements have since been met.

ActionSA in Ekurhuleni described the state of affairs as dire and a worrying lack of accountability and adherence to legal requirements as outlined in the Public Finance Management Act (PFMA).

The party's caucus leader Siyanda Makhubo said they condemned the failure to meet deadlines, adding the state of financial affairs points to a city in fiscal and financial management distress.

“It is becoming apparent the coalition government of the ANC-EFF, led by the hapless mayor Sivuyile Ngodwana, has led Ekurhuleni to the brink of being placed under administration for failure to pay creditors on time.

“The annual financial statement as audited by the auditor-general are an essential aspect of government transparency and accountability, providing critical insights into the financial health, performance and governance of city departments and entities.”

Makhubo said the financial statements are not only a legal obligation but also a fundamental tool to evaluate the effectiveness of government programmes and spending. He said the failure directly impacts the ability of council and residents to assess the performance of the city and hold officials accountable for their actions.

“In October 2023, ActionSA petitioned the speaker of council and the executive for a special council meeting to debate and hold the finance MMC accountable for the financial crisis. This was permitted. In this special council meeting, ActionSA expressed its concerns over the failure of service delivery, largely caused by the failure of payments to service providers which amounts to close to R2bn.”

The ActionSA caucus leader has alleged the city owed creditors R4bn.

“The continued disregard for the deadlines further undermines the principles of good governance and weakens public trust in government institutions. It also raises more questions than answers as to why the executive mayor and the MMC for finance would not table the city’s annual financial statements as stipulated by the MFMA.”

Dunga has slammed allegations of non-transparency, saying the delays do not lie with his office.

The finance MMC pointed fingers at the auditor-general's office, accusing it of holding up the process as it has not delivered the report to the municipality.

“We have not yet received the report. We have made all submissions to the auditor-general in line with the MFMA. We met the time frames on our side as stipulated. They are yet to report back to us about when we can expect the report.”

Dunga said last year's report was also tabled late due to the AG's office delaying it for unknown reasons. He said his office is not the first recipient of the outstanding report as it is delivered to the mayor.

He rejected opposition party claims that his office was withholding the report to keep them in the dark.

“There is nothing to conceal. It's an ill-informed position to want to label the EFF corrupt. The AG is a year behind with its audits. The audit report we are awaiting would have been from the 2022/23 financial year, a time frame of the thorough investigation of the previous administration of which we were not a part.

“If there's anything untoward in terms of the reflections and findings of the AG, it would not be on us to conceal. We have no obligation or duty to protect them in any way if there was a need.”

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