Since 2005, Thaba Chweu Local Municipality (TCLM) has not been able to improve on its audit outcomes, as once again established by the Auditor-General (AG) of South Africa.

For 15 years, this municipality has either received disclaimer or qualified audits as evaluated by the AG. The 2018/19 financial year is no different and TCLM once more received a qualified audit relating to its abysmal financial position. The AG issued the municipality with its findings and said its internal controls were still not in a good state.

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In the report, of which Steelburger/Lydenburg News received a copy, the AG said, “The instability at municipal manager and chief financial officer levels over three years, with TCLM relying on consultants, is evidence that there was no transfer of skills to empower municipal finance staff, or members were not competent to receive those skills”.

It went further, indicating that it was evident that the appointment of consultants in TCLM was used as a quick fix, which did not result in positive audit results. “The heavy reliance on consultants is not a sustainable solution. The municipality tends to regress when contracts come to an end, leaving it no other choice than to revert to using consultants.”

The AG lambasted TCLM for its disregard of adherence to the prescribed legislation. It stated, “It is difficult, if not impossible, for management to run the affairs of the municipality within the available resources, as evidenced by the ever-increasing unauthorised expenditure.” In the report, it is shocking to note that all irregular, fruitless and wasteful, as well as unauthorised expenditure, has increased by millions in three years. Irregular expenditure increased from R299 million in the 2016/17 financial year to R435 million in the latest report. Fruitless and wasteful expenditure increased from R103,5 million to R165 million and wasteful expenditure from R124,8 million to R188,7 million. It thus lost no less than R262 million in this respect for three years.

The AG report also said despite the executive council (EXCO) of Mpumalanga government’s calls to intervene and provide support and a financial recovery plan, the “pace of the intervention is not going as was anticipated and the impact is yet to be felt”.

Last week, the South African Local Government Association (Salga) paid a visit to TCLM to discuss the audit outcome and the implementation of a habitual audit plan. The meeting was held without any media invite, representative councillors or any other officials, except for a select group of the municipality’s management. It was rumoured to be a step towards placing TCLM under Section 139.

This is implemented to grant provincial executive board powers to intervene when a municipality cannot or does not fulfil an executive obligation in terms of the Constitution or legislation. However, this never transpired after the meeting between officials and those of Salga.

DA Cllr Spiros Couvaras told Steelburger/Lydenburg News that on account of the findings in the AG report, it was evident that the financial recovery plan was not being implemented. “Relating to the lack of skilled personnel at TCLM, it is also obvious that there are no qualified personnel. Why are employees not being trained? There is a training budget for that.”

Couvaras also said the municipality should have been placed under administration following Salga’s visit. “Why was this not done? How does that work? Why were only an elite few officials allowed into the meeting with Salga? TCLM is not being transparent. What is it hiding?”

The newspaper sent queries to Thaba Chweu about the AG report findings and Salga’s visit. It asked the municipality in response to the AG report, why the proposed Section 139 was not put into practice, how is it possible that after three years the so-called financial recovery plan was still not bearing fruit, how had all irregular, fruitless, wasteful and unauthorised expenditure increased and who should be held responsible for the continued financial deterioration of this municipality.

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TCLM acknowledged a WhatsApp message indicating that urgent feedback is required, yet nothing was received. A qualified opinion is a reflection of the auditor’s inability to give an unqualified, or clean, audit opinion. AG Kimi Makwetu released the audit outcomes for local government for the period 2018/19.

He titled this report, “Not much to go around, yet not the right hands at the till” to reflect the state of financial management in local government. In Makwetu’s latest local government general report, he paints an undesirable picture of billions of rand in funds allocated to municipalities being managed” in ways that are contrary to the prescripts and recognised accounting disciplines”.

He strongly cautioned that these administrative and governance lapses “made for very weak accountability and the consequent exposure to abuse of the public purse”.

The AGSA is the country’s supreme audit institution. It is the only institution that, by law, has to audit and report on how the government is spending taxpayers’ money. This has been the focus of the AGSA since its inception in 1911.