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SA municipalities are largely dysfunctional - EFF

Cape Town - The majority of municipalities in South Africa remains dysfunctional, charged the Economic Freedom Fighters in statement.

The party was responding the the 2014/15 municipal audit outcome released by the Auditor General Kimi Makwetu on Wednesday.

"While the audit outcome report shows that there is improvement in compliance with financial reporting, majority of municipalities remains dysfunctional," said spokesperson Mbuyiseni Ndlozi.

According to the audit report, more than 92% of the municipalities’ financial health is either concerning or requiring intervention, an increase of 10% from the previous financial year. In addition, 26% municipalities’ financial position was so poor; there is material uncertainty with regards to their ability to continue to provide basic services such as water, electricity, sanitation, and salaries for workers.
 
The EFF said although 59% of municipalities received clean audit opinions, it is 41% of the municipalities that received unclean opinions, which account for majority of expenditure.

"Municipalities with clean audit account for only R134bn, which is only 39% of the total expenditure of R347bn. While those with unqualified, adverse and disclaimer audit outcome represent more than R213bn, and it is these municipalities that are likely to fail to deliver basic services and public money is stole," said Ndlozi.
 
"It is extremely worrying that municipalities continue to disregard Municipal Financial Management Act (MFMA) and other legislation, especially concerning SCM.

"The fact that irregular expenditure has more than doubled since 2011 to an astounding R14.7bn and is incurred by an increasing number of municipalities is concerning. Also, both fruitless and unauthorised expenditure also increased to R1bn and R15.3bn respectively."

The EFF said the main reason for increasing irregular expenditure is the tender system. "It is for this reason that EFF’s people municipalities will abolish it once and for all."
 
It added that all political parties do not have mechanisms to hold councillors accountable and as a result there is no internal control. "The wasting of resources clearly demonstrates lack of consequences," said the EFF.

"The AG highlighted that there is possible fraud and improper conduct as 45% of municipalities that reported unauthorised, irregular and wasteful expenditure in the previous year had not investigated these transgression as required by the MFMA."  
 
The EFF said the increasing and unnecessary reliance on consultants on municipal basic functions such as preparations of financial statements, to an extent that municipalities spent R892m financial reporting services is a sign that municipalities do not have basic internal capacities.

"It is for this reasons that EFF’s people municipalities will abolish the use of consultants and instead build internal state capacity. EFF’s people municipality will employ all municipal workers, cleaners, security guards, refuse removal workers and all other workers necessary to deliver services to our people."
 
The report, said the EFF, makes it clear that local government does not generate enough revenue to fund operations to deliver services and invest in capital projects.

"Equitable share and conditional grant is not sufficient, and the division of revenue in its current form perpetuates apartheid spatial redistribution of resources, while poor communities remain destitute," it claimed.

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