• Caught in the debt trap?

    Help us help you by taking our second annual Debt survey and you could win R3 000.

  • Rich man, poor man

    Culture change from below is the only way to overcome poverty, says Leopold Scholtz.

  • Tech bubble talk

    After the tech euphoria of 2013, the fast-moving sector has hit a speed bump.

Data provided by McGregor BFA
All data is delayed
Loading...
See More

Gordhan: Punish crooked officials

Jul 23 2012 17:27 Sapa

Related Articles

Gordhan: SA likely to miss growth target

Karodia: Tenders must be controlled

SA becoming 'extractive society'

Gordhan: Financial literacy important

Gordhan lashes out at banks

Change rather than think, says Gordhan

 

Johannesburg - There must be consequences for municipal officials who break the law, Finance Minister Pravin Gordhan said on Monday.

The government was developing mechanisms to ensure municipal officials involved in tender corruption and irregular spending were brought to book, he said.

"We are going to require the law enforcement agencies to come to the party.

"All of us can make findings here, but it is the law enforcement agencies that must be able to prepare a case, and the prosecuting authorities must be able to prosecute the case," Gordhan said.

"It is in those circumstances that we can now say there are consequences for not operating according to the law. At the moment consequences are not there.

"When the consequences are not there, then a level of impunity begins to develop."

He was commenting on a recent report on local government finances in which Auditor General Terence Nombembe found irregularities in municipal tender processes were still a problem.

Nombembe said the Treasury was beginning to establish a procurement office - announced in February - to oversee issues relating to tender processes.

According to his report, only 5% of municipalities obtained clean audit reports in the financial year 2011/2012.

Procurement to the value of R3.5bn could not be audited because municipalities had not provided the required information or documentation.

In 46% of the audited municipalities, contracts were awarded to employees, councillors, and other state officials. A total of 65% of municipalities used unfair or uncompetitive procurement processes.

Nombembe said there were errors in information about finances, skills shortages, and service delivery.

"About 91% of municipalities employ consultants in areas where they have people employed to do the job.

"There is also the area of IT and controls, where the bulk of information at local government is housed and the controls to access and security of that information are very important."

None of the municipalities in the Eastern Cape, Free State, Gauteng, Northern Cape, and North West received clean audit reports.

None of the country's metros received clean audits, with financial statements not submitted in time for auditing by 13% of municipalities.

Nombembe was however excited that six municipalities had joined the clean audit category, taking the number to 13. These were in KwaZulu-Natal, Limpopo, Mpumalanga and the Western Cape.

However, he said 45% of the municipalities obtained unqualified audit reports and needed the help of auditors.

Cooperative Governance and Traditional Affairs Minister Richard Baloyi welcomed the report and commended those municipalities with clean audits. He said it was of grave concern that some municipalities had failed to provide financial statements on time.

"In that situation you are depriving us of an opportunity where we would know as to what is it that is happening and assess the situation," he said.

Baloyi said his department had already made efforts to improve staff shortages within municipalities and to address procurement irregularities.

Western Cape premier Helen Zille said the number of municipalities with clean audits was "concerning".

She said the constitution requires all provinces and national government to strengthen municipalities, and that the Western Cape had taken steps to monitor budget performance and improve accountability in its municipalities.

She said problems are exacerbated by overly complex municipal laws. Certain regulations need to be amended or scrapped, but the national government has so far been deaf to her pleas.

pravin gordhan  |  corruption  |  fraud
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
31 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're Talking About: Small Business

Standard Bank is looking for 12 entrepreneurs to participate in a 10-part TV series. They could win a R1m investment into their dream.
 
 

Fewer high-risk election areas - Mthethwa

There are fewer high-risk election areas this year compared to past elections, Police Minister Nathi Mthethwa has said while visiting Manenberg in Cape Town.

 
 

Latest elections multimedia

Watch what happened when we blindfolded Helen Zille and asked her to eat random things
13 days to elections - news you need to know
11 Julius Malema quotes you'll never forget
DA won't get 30% - Zille

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...