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AG: Municipalities wasted R815m

Pretoria - Local government audit results released on Wednesday revealed R815m in fruitless and wasteful expenditure, substantially up from the previous year.

Wasteful and fruitless expenditure grew by 31% for the 2012/2013 year, compared to the previous year, according to the Auditor General's report on audit outcomes of local governments.

This is defined as funds spent in vain that could have been avoided if the municipality or municipal entity had taken reasonable care.

Normal processes

According to the report, most of the institutions audited had inadequate measures in place to detect and quantify wasteful spending.

AG Kimi Makwetu told reporters that irregular expenditure, or funds spent not in accordance with relevant legislation, reached R11.6bn.

A total of R8bn of this amount represented goods and services received because normal processes governing procurement had not been followed.

The R8bn was included in the category of irregular expenditure because approved supply chain management processes had not been followed, meaning municipalities may have paid more than they should have.

This distinction had not been made in the previous year's report, he said.

Unqualified audits

Supporting documents were not provided for the remaining R3.6bn of the R11.6bn so the audits could not confirm whether the goods or services had been received.

Irregular spending grew by 24% from the previous year and was observed in the audits of 83% of district municipalities. It was a problem common to all provinces.

Of the 319 audits, 22 municipalities and eight municipal entities (9%) had unqualified audits with no findings, otherwise known as clean audits.

One of these, and the only metropolitan to receive a clean audit, was the City of Cape Town.


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