Despite R235 million spent on consultants by Limpopo's municipalities, the AG still criticised them for poor financial reporting.
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The DA in Limpopo wants service providers to face penalties for botched financial reporting.
This follows Auditor-General Tsakani Maluleke’s concerns about Limpopo’s municipalities‘ use of financial consultants in the 2024-25 financial year.
Concerns about municipalities using consultants
In the Consolidated General Reports on Local Government Audit Outcomes 2024-25, the auditor-general (AG) raised concerns that all 27 municipalities in the province used consultants for financial reporting, at a total cost of R235.85 million.
The biggest spenders include:
- Mokgalakwena Local Municipality – R31 476 244
- Polokwane Municipality – R26 624 049
- Fetakgomo-Tubatse Local Municipality – R22 510 114
- Thabazimbi Local Municipality – R19 383 763
- Collins Chabane Local Municipality – R17 250 146
- Modimolle-Mookgopong Local Municipality – R16 502 770
- Maruleng Local Municipality – R11 751 321
Despite the large amount of money spent, the AG’s report says 20 municipalities (74%) submitted financial statements with material misstatements in the areas where the consultants worked, and the quality of the financial statements remained poor because finance units did not adequately review the consultants’ work.
These consultant fees, Maluleke’s report states, were in addition to the R885 million that municipalities spent on their finance units.
Skills audit
DA Member of the Provincial Legislature (MPL) Jacques Smalle said his party would also request a skills audit to be conducted in all municipal finance units.
“The AG cited poor financial reporting, driven by a lack of skills in the finance units, weak in-year controls, poor record-keeping and a lack of consequence management, resulting in recurring errors as reasons for the chronic underperformance. While spending on consultants remained stubbornly high, questions remain about the real value for money and the lack of capacity of consultants. Material misstatements were identified in 74% of financial reports submitted for auditing, including work done by consultants,” said Smalle.
He said the results confirmed that financial management disciplines remain significantly weak, and municipalities increasingly rely on consultants rather than improving their own financial reporting and accountability.
“Eleven municipalities operated on an unfunded budget, and a further five municipalities reported deficits, which indicate a deterioration in financial health.”
Effectiveness of chartered accountants
During a recent media briefing, Polokwane’s Mayor John Mpe said his municipality has four chartered accountants to help its financial reporting.
“We have recently made 46 appointments in the budget and Treasury office. Of the total, four of them are qualified chartered accountants (CAs) – a move that not only sustained our vivid performance in financial accounting, but also sustained our annual audit outcomes,” he claimed.
However, the AG’s recent report will raise questions about these accountants’ effectiveness.
