The Minister of Cooperative Governance and Traditional Affairs (CoGTA), Dr Nkosazana Dlamini Zuma welcomes the Auditor-General municipal audit report released on Wednesday, 26 June 2019 for the 2017/18 financial year.
While the report showed some improvements across municipalities, it largely presents a picture of a decline in some key areas. The Minister welcomes the improvements outlined by the Auditor General but the overall regression by some municipalities is of serious concern.
The AG lamented the fact that “local government role players have been slow in implementing, and in many instances even disregarded, the audit office’s recommendations”. Minister Dlamini Zuma expressed concern that there are some municipalities which have not responded positively to address areas of challenges raised by his report in 2018.
The Minister fully supports the work of the Auditor General and would like to urge municipalities to accept the outcomes as a very useful yardstick to gauge their general performance as dictated by our constitution. Through the years, this report corroborated CoGTA’s own assessment through the Back to Basics programmes which indicates that a number of municipalities are dysfunctional.
The Auditor-General has reported that out of the 257 municipalities, only 18 have achieved clean audits. Even though CoGTA Ministry congratulates the 18 municipalities that received the unqualified audit opinion with no findings in the period 2017/18, it is still a drop from 33 municipalities for the period 2016/17. “This general regression of the audit outcome as announced by the Auditor-General (AG) today is a serious concern”, said Minister Dlamini Zuma.
This is a serious concern and the CoGTA leadership led by the Minister will continue to intensify engagement with all municipalities. Minister Dlamini Zuma expressed serious concern that the audit outcomes for the financial year ending June 2018 has regressed in almost all areas. This negative trend is of concern touching on issues ranging from weak governance, the poor quality of annual financial statements, internal control weaknesses, and performance challenges.
The Minister agrees with the AG that failure by Office bearers, senior management and officials failed to develop, implement and monitor effective systems and processes of internal control, including corrective action is a major factor contributing to this decline. In this regard, even though the AG report shows improvement in irregular expenditure is from R29.7 billion in 2016/2017 to R25.2bn in 2017/2018, the number is still high.
This calls for effective and efficient functioning municipalities.
On the part of the department, processes to stabilise distressed municipalities are underway as part of our priority to build ethical and sound municipalities through the district based approach to enhance the capacity of Municipalities to improve service delivery . There must be accountability where systems fail and perennial challenges in municipalities are not fixed.
The aim of CoGTA is to have municipalities delivering efficient services to our people to ensure that we reverse what the AG report calls a deteriorating local government. In this regard, the department is involved in the following activities:
Currently the department support municipalities on the following programmes:
- Development and implementation of simplified revenue plans,
- Development of financial recovery plans and credible budgets in collaboration with National Treasury
- Support municipalities with the implementation of post audit action plans in collaboration with National Treasury
- Support intervention on intergovernmental debts including Eskom and Water boards
- Capacity building on financial and performance management
- Deployment of District Technical Support Teams and MFIP advisors to support struggling municipalities with focus on building internal capacity
- Intervention through Section 139 of the constitution for financial and institutional stabilisation
- Established Governance Support Teams; Panels which will be building systems and capacity of dysfunctional municipalities
- Mentoring and early warning system
- Building dashboard for early interventions
- Oversight over party structures processes for speedy resolutions of identification and deployment of appropriately suitable candidate
- Party processes to aligned with legislative requirements for compliance with recruitment and selection processes
- Implement criteria for retention of certain number of Cllrs based on proper assessment of performance during their tenure
- Vigorous training programmes and empowerment of new Cllrs which includes vigorous candidate selection processes on the quality.
The Rapid Response technical team which is assisting the financially distressed municipalities develop financial recovery plans in collaboration with the National Treasury to ensure that they are able to access the Financial Management grants offered by the National Treasury to promote reforms in financial management and build capacity in municipalities.
This is meant to ensure that municipalities have effective governance systems in place; and qualified and competent senior professionals to manage municipal finances with accountability and within applicable policies.
CoGTA will continue to provide the required support to all Municipalities that are in distress to ensure that they deliver services as per their mandate.
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