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
"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
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
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
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.