A new model of local government in which all municipalities are tailored to generate revenue and efficiently deliver services to the people will best cure the ills of troubled municipalities.
This was the view of political and public policy analyst Zamikhaya Maseti, who suggested that some poor municipalities with no tax base needed to be dismantled and merged with nearby, richer municipalities.
He said underperformance and poor financial management could be overcome with drastic turnaround measures, including collapsing the dismally poor and underperforming local authorities.
That only 18 of the more than 257 municipalities in the country received clean audits, was indicative of a grave problem. The intervention must address areas such as financial management and lack of skills and leadership ethics, he said.
Maseti’s views were echoed by local government consultant Fikile Bili, who said poor leadership was the most crippling factor.
Bili believed that the deployment of cadres, such as branch chairpersons and secretaries with no qualifications, as councillors and mayors was behind the collapses.
Maseti said it was time for Cooperative Governance and Traditional Affairs (Cogta) Minister Nkosazana Dlamini-Zuma to wield the big stick.
Dlamini-Zuma was credited for having drastically turned around the home affairs department from an inefficient and corrupt entity to one that worked optimally.
On July 10, Dlamini-Zuma tabled her first departmental budget vote in her new cooperative governance and traditional affairs portfolio.
As a result of malfunctioning municipalities, the number of major service delivery protests increased from 27 in 2008 to 237 in 2018, a figure released recently by Municipality IQ, she said.
Similarly, the 2019 Eldman Trust Barometer results indicated a declining trust level in government, from 15% to 14% , from 2018 to 2019. This report noted that the major source of decline was local government.
“At provincial level, we all know that North West is under section 100 administration ,” Dlamini-Zuma said. “It is common knowledge most of the municipalities, some metros and districts are not fulfilling their responsibilities as they should.
“There are 40 municipalities that are currently under section 139 administration and many more that are dysfunctional or struggling,” Dlamini-Zuma said.
The auditor-general’s 2017-18 municipal audit report, recently released, concluded that the majority of municipalities were below the acceptable audit level. A total of 101 municipalities had unqualified audits with findings, 78 had qualified audits, and 10 had adverse findings.
The number of municipalities with disclaimers marginally decreased to 26 from 31 in 2016-17, while 24 audits were still outstanding.
The minister blamed the situation on noncompliance with legislation, poor financial management, internal control and supply chain weaknesses, and nonperformance.
Maseti said local government had become a dumping site for incompetent and unqualified officials.
There were no MPs and qualified senior government officials who were willing to serve at municipal level because they regarded it as a demotion, he said. This was an opportunity for chancers.
Concern at decline of local authority audits
The South African Local Government Association (Salga), an autonomous body that promotes and protects the interests of local governments, is concerned about the regression in audit performance of local authorities.
At the time of the latest auditor-general’s (AG) report, the association was worried by the increase in audits not finalised by the legislated deadline.
Salga was concerned that the majority of findings still revolved around the quality of financial statements, quality of performance reporting, the financial health of municipalities and increases in unauthorised, irregular and fruitless or wasteful expenditure.
“The AG correctly highlighted the deteriorating financial health of municipalities, with 31% of municipalities categorised as financially vulnerable,” Salga said. “In addition to this, 39% of municipalities required intervention.”
According to Salga, the municipalities owed Eskom a whopping R18.26 billion, with arrears amounting to R9.12 billion, while debt to water boards stood at R 9.05 billion, with arrears at R5.85 billion.
These figures, coupled with the inability to collect revenue, posed a significant challenge for municipalities to pass credible funded budgets.
The situation was not helped by intergovernmental debt owed to municipalities, Salga said.