Premier berates poor performers

The state of the finances of the province’s municipalities and what to do about them were discussed last Thursday when premier Stan Mathabatha met with municipalities’ management.

Mathabatha read municipalities the riot act saying the recently released AG’s report on municipalities’ financial statements compelled him to convene the meeting, as the collapse of local government would have dire consequences in people’s lives. He said there was nothing positive to be said about the report and nothing was done to correct mistakes highlighted in previous AG reports despite the Public Finance Management Act being in place for many years already. He ascribed the problem to lack of project management and proper planning. He praised Waterberg District Municipality for their clean audit and said other municipalities could learn from them and their dedicated personnel.

He reiterated that good cadres had to be appointed in vacancies, and that a good cadre did not mean a member of the ANC, but any person with capabilities and integrity, irrespective of political affiliation or skin colour. “It is about competency and skills,” he said.

Mathabatha said providing water, sanitation and electricity was at the centre of municipal service delivery. He demanded accountability and financially strong municipalities in the province and there would be consequences, without exception, for wrongdoing. He said people expected municipalities to grow the economy and failure to do so was failing government and undermining the ANC. He condemned shoddy work and political interference and said municipal management should not let it happen.

David Magabe the South African Local Government Association Limpopo chairperson, when opening the proceedings, told delegates that all municipalities in the province faced challenges and it was imperative to better the financial results to boost public confidence in municipalities.

Limpopo only had one municipality which had a clean audit and in general municipalities regressed since the last financial year.

Satish Pillai from the AG’s office presented an overview about the municipalities’s regression over the last three years and the problems facing most municipalities: There were material findings in 94% of the municipalities’ financial statements, 97% of municipalities were found to have poor supply chain management procedures and intervention was needed, and 93% had problems with their annual financial statements with material misstatements in 86% of statements. The R1,5 billion irregular expenditure was the highest ever, 90% of municipalities had irregular, fruitless and wasteful expenditure, the majority of municipalities had problems with asset and liability management and 77% with expenditure management. Pillai said there was an urgent need for intervention. Only 24% of information supplied was reliable and IT management is a big a big problem throughout the province.

The quality of submitted financial statements in 93% of cases was poor, even if a lot of money was spent on consultants to assist municipalities, no skills were transferred.

The reasons for the poor performance was stated as key positions that were not filled (80% of municipalities), lack of consequences for officials who contravened rules and regulations (63%) and lack of good leadership (73% of municipalities showed a slow response to address causes of the previous poor audit outcomes).

Cooperative governance, human settlements and traditional affairs MEC Ishmail Kgetjepe criticised “malicious compliance” whereby municipalities handed in financial statements knowing it was not right.

Closing the meeting Mathabatha said turn-around strategies must be implemented with immediate effect and if municipalities struggled, they should ask for assistance.