Municipalities' misuse of money rockets

2011-06-30 06:53

Pretoria - Misappropriation of municipal funds has, according to the latest report by the Auditor-General (AG) increased dramatically, but the situation might be even worse than it currently appears.

Unauthorised, irregular, fruitless and wasteful expenditure by municipalities rose 77% in the financial year to end-June 2010 – and this is probably an underestimate.

A full R9.2bn was lost to service delivery in this manner. The comparative amount in the previous financial year was R5.2bn.

This was revealed on Wednesday in the latest report on countrywide municipal audits for the 2009/10 financial year announced by AG Terence Nombembe at a National Press Club news conference in Pretoria.

The R3.5bn revenue loss from water and electricity distribution, write-offs of R3.6bn in bad debts and underexpenditure amounting to R1.2bn which occurred in only five Western
Cape municipalities was not  included in the above R9.2bn.

Nombembe attributed the sharp increase to improved financial reporting. But he conceded that most municipalities had not yet attained the required standard of reporting. The real picture might therefore be even gloomier.

Nombembe said that as reporting improved problems became more evident and it was easier to do something about them.

He said that although progress with financial reporting was slow, it was moving in the right direction.

In all, 57 municipalities had improved audit outcomes, 165 were unchanged and 15 had regressed.

The number of municipalities with clean audits rose from four to seven.

The number of municipalities for which an audit opinion had been withheld – the poorest possible outcome – had fallen 46% from 121 to 65. But Nombembe pointed out that 51 audits were still outstanding at January 31, and had therefore not been included in the analysis.

Of these laggards, most had received withheld opinions or unfavourable reports in the previous financial year.

Johannesburg was one of those whose report had not been received by deadline.

Nombembe said systemic problems existed in Johannesburg, which included the widely reported consumer accounts headache.

In Tshwane R1.5bn worth of unauthorised expenditure had taken place in the period under review. This was more than in KwaZulu-Natal, Limpopo, Mpumalanga and Northern Cape combined. According to Nombembe, Tshwane mayor Kgosientso Ramokgopa was spearheading efforts to improve corporate governance in his council.

Reporting on service delivery was generally poor, with 84% of municipalities and municipal entities having failed to comply with regulatory requirements. The information supplied by 65% was not meaningful and 48% were unable to substantiate the information that they provided.

Nombembe said adequate funds, instruments and support were available to make local government in South Africa work, but there was a lack of leadership.

The following municipal authorities received totally clean reports:

  • Cape Town Metro (Western Cape)
  • Ehlanzeni District Municipality (Mpumalanga)
  • Steve Tshwete (Mpumalanga)
  • Victor Khanye (Mpumalanga)
  • Metsweding (Gauteng, since incorporated into Tshwane)
  • Frances Baard (Northern Cape)
  • Fetakgomo (Limpopo)

- Sake24
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  • Marcell - 2011-06-30 07:14

    And what is going to happen about it: NUTTING, ZIP!

  • BOFFINBOB - 2011-06-30 07:16

    Yes. The result of BEE & AA. The cost of this " excersize " has cost this country dearly.

  • Ralph Long - 2011-06-30 07:28

    You get what you vote for. When will the mindless voting for the ANC stop? Unbelievable.

  • Guido - 2011-06-30 07:29

    time to revolt and stop paying all bills, get rid of who is now in charge and privatise the municipalities, put a businessman in charge elected by by the people, who will report to every one on a monthly basis by means of a monthly statement which includes your billing amounts etc. List the company so I can buy shares in it. Get this right and I have no pblem with a R5M salary + divident. Do not know if we have anyone left in this country capable of implementing and running it. Any volenteers ? You can head the army of unhappy people and empower them the correct way !

  • BOFFINBOB - 2011-06-30 07:32

    The result of BEE & AA, which has cost this country dearly.

  • JM - 2011-06-30 07:38

    This is beyond appalling. It is criminal!! Add to this the police building lease spectacle and the recent arms deal bribery & corruption claims. Now how the hell can nationalisation and expropriation of land without compensation be presented as solutions to create economic freedom? The main political opposition parties in this country should create an advertisement campaign which reflects a summary of the theft that took place in this country since 1994 and publish it in/on media channels accessible to the poor with the heading – “Do you want to know why you are so poor?”

  • KrayZee - 2011-06-30 07:53

    They are seeking "economic freedom" in their lifetimes. Please send all these reports to Julius Malema and ANC Youth League. If they can recover most of the cash wasted and stolen by their cadres, they would not need to nationalise any private resources.

  • mymening - 2011-06-30 07:53

    PLEASE - Mass demonstrations like this country has never seen before. We have to embarrass them - if that is possible at all. We simply cannot allow this to continue.

  • jakes - 2011-06-30 07:57

    These ANC trolls are really raping our country!!!! Bunch of thieving criminals!!!!

  • McDaNife - 2011-06-30 07:57

    The politician have not been reading peoples comment, and why the majority of the South Africans are disatisfied with the service delivery by protesting. Corruption, corruption and corruption is the order of the day. There should be a thorough investigation to find out where all the money has gone to and the perpetrators severly dealt with and fired on the spot. They got to wake up, we dont want to see our country hitting the dumps.

  • ratex - 2011-06-30 08:05

    No suprises here. We have been moaning about this for years. Why are these inept people still employed in the same positions that they are abusing?Why do the anc not fire these people? Why do their voters still keep voting the sels same corrpt officials into power?

  • Happygas - 2011-06-30 08:15

    Tshwane????on the back of Metsweding!!!colonialism had nothing on this sort of robbery.

  • Jeremy - 2011-06-30 08:36

    Well done ANC - You people dont even try do anything positive. You are the only political party with a I R Baboon recruitment policy.

  • David - 2011-06-30 08:38

    I heard the minister on 702 defending this shocking record yesterday saying much progress had been made from previously 2 clean council reports to seven currently(out of +/- 300 councils). what a joke. politicians are thieves who's only trick is rapeing tax and rate payers -- its time for ROBIN HOOD. perhaps they should reflect on the advice they got from the accountants employed to analyse this mess after all the one thing they won't refuse to do is pay their expensive bill.

  • WhoGivesAshi - 2011-06-30 09:38

    What do you expect with these useless darkies running the show???

  • capetonian - 2011-06-30 10:00

    Hey! JZ, any comments on this?? Oh...sorry, too busy politicking and with your mate up there in Libya in serious trouble, a lot on to worry about lately - the Unions and mini-me never ends. But, never mind you've got the four wives and 22(?) kids to help you relax...

  • Spade - 2011-06-30 10:01

    It would seem obvious that there is an endemic problem, and that it is not being addressed effectively by those in positions of oversight. The public is well informed regarding the shortcomings, thanks to bodies like the Auditor-General and even the media, but we are not well informed when it comes to actions being taken to remedy the situation. Perhaps because nothing is actually being done?

  • 50something - 2011-06-30 10:15

    "In Tshwane R1.5bn worth of unauthorised expenditure had taken place in the period under review. This was more than in KwaZulu-Natal, Limpopo, Mpumalanga and Northern Cape combined." The rest of the report reads like a horror story. What is being done about this? It is our money they are wasting!!!, yet they are very quick to increase councillors and their salaries and the cost of services. This cannot carry on like this!!!

  • robyn - 2011-06-30 10:32

    oh my gosh , this is terrible

  • Nasdaq7 - 2011-06-30 10:40

    The money is wasted Vavi. The government is a financial drain, expand it and the drain expands.

  • Nuck Choris - 2011-06-30 12:37

    "unauthorised expenditure" surely someone somewhere must be responsible. Fire them and make them pay it back. This is the only way forward. If there are no repercussions this will continue. This country is being run the way we hoped it would not.... like a shebeen.

  • fraserm - 2011-07-01 01:39

    Because they are allowed to. No control, its not their money, its ours and no example set by anybody in leadership! We are doomed.

  • Flashman - 2011-07-13 08:05

    Mugabe has taught them well.

  • JJDXB - 2011-07-13 08:37

    The lost of billions of Rands.... and the ANC want to investigate the apartheids regime with regards to the “billions” that apparently disappeared. What a joke of a government………

  • RIAAN - 2011-07-13 08:53

    Why must 3rd tier goverment bother about finansial reports if 2nd and 1st tier goverment does not set an example ? Yes, very sad, the "leaders" that has no culture of leading. In the land of the blind...

  • croix - 2011-07-13 16:21

    "Lack of leadership"???? TWAK man! Lack of S-K-I-L-L-S, as a direct result of CADRE DEPLOYMENT, is the real reason! When will Zuma sign the new legislation (on his desk for two? months now)? Come on Jakob, get with the program !!

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