Limpopo Premier Stan Mathabatha says investments in VBS Mutual Bank could be behind none of the province’s 27 municipalities receiving clean audits from the auditor-general for the past financial year.
“There are too many municipalities not doing things the right way. That not a single municipality received a clean audit is worrying,” he said yesterday.
Nine municipalities in Limpopo invested R1.2 billion into the now defunct VBS Mutual Bank last year. This was despite Treasury warning that it was illegal for municipalities to invest money in a mutual bank.
Addressing an audit outcomes meeting attended by top municipal officials and the South African Local Government Association just outside Polokwane, Mathabatha said the reason most municipalities’ spending records were dismal was that there were no consequences for not following proper procedures.
“It is because of this lack of consequences that R1.5 billion of municipal resources were lost through the VBS investment,” he said.
Limpopo has five district municipalities, which are subdivided into 22 local municipalities.
Seven of the provinces were listed among the country’s 87 dysfunctional and distressed municipalities by Minister of Cooperative Governance Zweli Mkhize last year.
“I think it is a very serious indictment on all of us to have even a single municipality classified as dysfunctional.
“It is also a serious indictment on the mayors and councillors who preside over such municipalities.
“As you know, dysfunctionality in most municipalities is as a result of poor governance, political instability, poor audit outcomes, high vacancy rates at senior management level and poor spending on the municipal infrastructure grant,” Mathabatha told the municipal bosses.
Capricorn district municipality scooped two awards for getting unqualified audit opinions for the past three years and for spending 100% of its allocated budget.