It’s official: Eastern Cape municipalities are the country’s biggest culprits when it comes to irregular expenditure.
That is the finding of auditor-general (AG) Kimi Makwetu, who this week revealed that Eastern Cape municipalities incurred more than R7.2bn in irregular expenditure in the 2017/2018 financial year.
Shockingly, only two municipalities in the entire province managed to achieve a clean audit. There are 39 municipalities in the province.
The irregular spending accounts for 15% of provincial councils’ total budget in the year under review.
The province’s cumulative irregular expenditure, Makwetu said, now stands at R25.5bn.
He said this amount includes R18.3bn brought forward from the previous years that was not properly investigated or where councils did not take appropriate action based on the outcomes of their investigations.
Announcing the latest audit outcomes on Wednesday, Makwetu said the province, in the year under review, had spent R1.2bn in unauthorised expenditure, while R75 million was blown on fruitless and wasteful expenditure.
Nelson Mandela Bay Metro (NMBM) is the country’s biggest culprit, with their figure standing at just over R3bn in irregular expenditure.
The City of Tshwane is the second worst with R1.6bn in irregular expenditure.
Only two municipalities in the EC managed a clean audit
The OR Tambo district, the third worst offender in the country, blew R1.3bn of taxpayers’ money on irregular transactions.
Also appearing in the top ten of irregular spenders in the country is Alfred Nzo district municipality (seventh) with R622m in their public purse, spent irregularly.
Only two municipalities in the province managed clean audits, 18 achieved unqualified audits with findings, 13 obtained qualified with findings opinion, two had adverse findings, while three others were slapped with the worst audit outcomes, disclaimers.
Senqu municipality and Joe Gqabi district managed to achieve clean audits, while Buffalo City Metro (BCM), which accounts for 20% of the local government spend in the province, according to Makwetu, was one of the five municipalities that regressed from an unqualified audit opinion with findings in the previous year, to a qualified audit opinion.
BCM is the only metro in the country which regressed in its findings.
Makwetu said NMBM “has been struggling to improve its audit outcome, as it has received a qualified opinion for seven years in a row since 2011/2012”.
The AG is also “concerned” about the inability of three of the four provincial municipalities that were recently created through mergers, to achieve positive audit outcomes.
The three councils – Enoch Mgijima, Dr Beyers Naudé and Walter Sisulu – “received repeat disclaimed opinions in the year under review, as they struggled with basic record keeping as well as accounting complexities resulting from the mergers”.
Sakhisizwe is the only council in the province with “outstanding audits”.
The AG raised concerns that only 29% of municipalities were able to produce performance reports that were useful and reliable.
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