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Where are mayors and MECs when municipalities collapse, asks AG

Elected politicians need to accept their responsibility to make things work at local level, says Maluleke

The Chris Hani District Municipality in the Eastern Cape is one of 25 councils that received a disclaimed audit opinion from the auditor-general in the 2020/2021 financial year.

The municipality could not account for funds allocated to it due to inadequate record keeping. This despite the municipality paying consultants to prepare its financial statements every year.

“This year, when we dug deeper to understand what is it they are paying for, we realised that R34m is being paid to a consultant to help them [with] their VAT returns,” the AG, Tsakani Maluleke, told the Sunday Times this week.

“They agree with this consultant that the consultant should get a portion of the amount of money that comes from Sars [South African Revenue Service]. They have a CFO appointed and paid, and yet they go hire this consultant, for this amount of money, and then you ask yourself, who is making these decisions? If it’s the municipal manager, where is the mayor that is supervising them?”

In Masilonyana, Free State, the municipality collects little revenue for itself due to a dysfunctional billing system.  So it uses its local government equitable share — money that the national Treasury makes available for municipalities to spend on such items as services for the indigent —  to pay for consultants.

“Again you’ve got to ask yourself, where is the provincial treasury when this happens, because their job is to help build financial management capacity in the province. Where is the monitoring capacity, because their job is to monitor how budgets are being spent by municipalities,” said Maluleke.

By the time I issue certificate of debt, understand that all of you have failed.So, be careful what you wish for

Tsakani Maluleke

She said that in criticising municipal officials, it had to be remembered that the governance system was intended to provide support for them; the role of other players in the accountability ecosystem could not be understated.

“If the municipal manager is failing, where is the mayor who is supposed to be holding him accountable, where is the MPAC [municipal public accounts committee], where is the council because that’s their job to oversee that.

“If they are failing, where is the MEC of Cogta [co-operative governance & traditional affairs], where is Cogta as a department because that’s their job and if they are failing as Cogta, where is the provincial legislature?”

Maluleke said the time to point fingers at municipalities only and say they are a problem by themselves is long gone. “We need to urgently propel everybody in this ecosystem to do their part.”

Politicians often asked why her office was not using its new powers, as provided for in  the Public Audit Act, to  issue a certificate of debt and get the accounting officer to pay for the losses.

But these politicians seemed not to understand that, by the time the AG issues a certificate of debt, it was not just one accounting officer but everybody in that ecosystem — including the MEC, MP or MPL responsible — had failed.

“It’s a confirmation of failure, not just on the part of the accounting officer but on the MEC who should supervise them, on the provincial legislature that should conduct oversight. By the time I issue certificate of debt, understand that all of you have failed.

“So, be careful what you wish for.”

In the year under review, R10.4bn was spent in payroll costs for people charged with managing finances for their municipalities. During the same period, the same system paid R1.26bn to consultants to prepare financial statements for the same municipalities.

“If you’ve got a team whose job is to manage finances, the very basics that they can do is prepare quality financial statements during the year and at the end of the year. They are not able to do that,” she said.

When her office began the auditing process, only 62 municipalities gave auditors credible financial statements. The number eventually rose to 141. 

Again, Maluleke said this reflected on the political leaders who chose municipal managers and  directors.

“That’s why we call on them to appoint people who have the skills and the competence to do what is required.

“If they hire people and then don’t allow them space to do their work, that’s again a failure which weakens institutions because you are not giving the space for those professionals to do their work if you are interfering. You are also compromising accountability in the process,” Maluleke said.

“If those appointed officials don’t do their work, and they are not being accountable, then you as political leaders are failing in your duties given in law, because your job is to exercise oversight on the running of the municipality by the appointed official.

“To my mind it’s just about making sure that the posture of the elected leaders of municipalities changes. If those elected leaders don’t understand their job, they don’t take it seriously, then you will never really move,” she said.

Sunday Times

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