Latest news with #Maluleke
The Citizen
a day ago
- Business
- The Citizen
Municipalities: It's time to hold mayors to account
There's been some improvement in the number of audit disclaimers, but overall it's pretty much a stuck record of ongoing poor performance for metros and municipalities. 'Widespread instability' is one characteristic of local government as described by Auditor-General Tsakani Maluleke. Pciture: GCIS It's time to hold mayors, speakers and council members to account for municipal failures, said Auditor-General of SA Tsakani Maluleke during a Wednesday parliamentary briefing on local government audit outcomes. Despite calls on municipal and metro leaders to act with urgency to overhaul local government – which is characterised by 'insufficient accountability, failing service delivery, poor financial management and governance, weak institutional capability and widespread instability' – the action taken has been too slow and has had little impact on the lived realities of South Africans, said Maluleke. 'Legislation is clear on what the responsibilities of mayors, councils and executive authorities are – it is the diligent and effective implementation of these responsibilities that is lacking.' The AG's latest report on local government audit outcomes for the 2024 financial year shows that just 16% of 257 municipalities received clean audits, and most of these (17) were in the Western Cape. The number of clean audits (41) is unchanged from 2021. Those with clean audits have the discipline and necessary governance to spend predictably and efficiently, said the AG. Read more 'Same story year after year': MPs unhappy as Auditor-General reveals local government audit outcomes A clean audit is not always an indicator of good service delivery and does not always reflect the lived experience of all communities in a municipal area, but it reflects honest communication with communities as to whether and when their needs will be met through accurate records. ALSO READ: 'Same story year after year': MPs unhappy as Auditor-General reveals local government audit outcomes There was almost no change in the number of municipalities with 'unqualified with findings' audits – there were 99 in 2024, compared to 100 in 2021. Things get worse from there: 93 (35%) were given 'qualified with findings' audit outcomes compared to 83 in 2021. The number of 'adverse with findings' outcomes increased to six (from four in 2021). Thirteen municipalities did not submit their financial statements on time. Of these, seven – with a combined budget of R6.85 billion – habitually disregard the legislated requirement to submit on time. There was a notable improvement in 'disclaimed with findings' audits from 28 in 2021 to 11 in 2024. More concerning is the number of audits outstanding – 10 in 2024, up from just one in 2021. ALSO READ: Questions about municipal manager's qualifications after R927 000 spent on 22 laptops – report Outcomes 'leave much to be desired' 'It's great we are reversing disclaimers, but this still leaves much to be desired,' said Maluleke. 'Unqualified with findings means that institution does not have the culture to plan, execute and deploy public funds efficiently.' It signifies weak internal controls to improve the quality of spending, as well as lax governance. The Free State and North West appear once again as the provinces with the most problematic municipalities, with either disclaimers or non-submission of statements. Source: Auditor-General SA ALSO READ: 149 municipalities are R1.4 billion in arrears on their pension fund payments Clean audit for Cape Town Of the eight metros, only Cape Town received a clean audit. Three (Ekurhuleni, Johannesburg and eThekwini) received unqualified with findings audits, and three (Buffalo City, Tshwane and Nelson Mandela Bay) earned qualified with findings audits. 'Of those with unqualified with findings [outcomes], only Ekurhuleni gave us quality financial statements. 'City of Joburg did not give us quality financial statements,' said Maluleke. 'They should have the skills and resources to compile financial statements.' The AG detailed some of the problems at Buffalo City: a vacancy for a district engineer for electricity that went unfilled for 80 months, and a vacancy for a sanitation engineer that had not been filled after 24 months. 'We must ask the question why things fall apart? Why can they not get the skills they need?' said Maluleke. '[There are] challenges of stability at council and administration levels, and institutions have become weaker over the years.' ALSO READ: SIU finds no corruption in City of Joburg but Auditor-General has concerns Infrastructure projects The result of these deficiencies is that the financial health of local government is weakening. This is aggravated by poor management of infrastructure projects, which are delayed, poorly planned, inadequately supervised, and often over budget. Deficiencies were identified at 87 of the 113 projects (77%) that were visited by the AG's office. Overall, metros have continued to regress from 2021, despite their greater capacity and large budgets. SA's eight metros are responsible for delivering services to 8.9 million people, or 46% of all households in the country. The financial health of metros remains concerning as they struggle to collect revenue, despite implementing recovery and turnaround plans. ALSO READ: Mashatile: How national government is aiming to reform local municipalities Unfunded budgets Some 113 municipalities adopted unfunded budgets in the 2024 financial year, contrary to the advice given by national and provincial treasuries. Unauthorised spending of R31.8 billion incurred by 174 municipalities was the result of unreliable information and a lack of diligence and impactful decision-making by mayors and councils. 'Municipal finances are severely troubled and even though funds are constrained, mayors, councils and municipalities are displaying little fiscal discipline. 'Money paid by residents and funded from the national purse is often wasted through poor financial and procurement decisions and project failures,' said the AG. 'The limited funds that municipalities had were also not spent carefully. The main reasons for the continuing financial losses and waste were widespread poor payment practices, uncompetitive and uneconomical procurement practices, limited value and benefit received for money spent, and weaknesses in project management.' Creditors are not paid within legislated timelines, and the debt owed to Eskom and the water boards remains high and continues to increase. If these debts are not paid, communities are left without access to basic services such as electricity and water. ALSO READ: Emfuleni's R636 million betrayal: Critical infrastructure funds returned while residents suffer Failure of the Eskom debt relief programme The Eskom debt relief programme was intended to provide some relief to municipalities that struggled to pay the electricity supplier, but 53 of the participating municipalities (84%) are not complying with the conditions of the programme, warns Maluleke. Another problem is the ongoing non-compliance with procurement legislation, leading to financial losses and contractors not delivering. Some 214 municipalities had findings on non-compliance with procurement and contract management legislation. The lack of consequences in local government continuously slows any progress towards improved service delivery and financial performance. This is most evident in poor and slow responses to investigating allegations of financial and supply chain management misconduct and fraud indicators. Also evident is a lack of enthusiasm for dealing with unauthorised, irregular, and fruitless and wasteful expenditure. ALSO READ: Distressed municipalities spent less than 4% of budget on maintenance — Cogta Material irregularities Some 281 material irregularities worth R8.7 billion were identified during the year, mostly for goods and services not received or of poor quality or not being in line with contracts. Late payment of suppliers leads to interest charges, with inefficient use of resources resulting in little or no benefit for the money spent. Revenue is lost due to incorrect or no billing, debt not recovered, and unrecorded receipts. Another problem among poorly performing municipalities is the use of consultants, at huge cost, to little apparent avail. ALSO READ: How residents in one North West town are tackling municipal collapse Call to action Maluleke issued a call to action for local government turnaround: Build capable institutions with intergovernmental support; Professionalise and build capacity in local government, making it an attractive place for professionals to work; and Instil a culture of ethics and accountability, characterised by consequence management and where material irregularities are treated with the urgency they deserve. This article was republished from Moneyweb. Read the original here.
IOL News
2 days ago
- Business
- IOL News
Mayors face scrutiny as Auditor-General calls for improved oversight
Auditor-General Tsakani Maluleke has said that mayors of municipalities need to play their oversight role. Image: Independent Newspapers Archives Mayors of poorly performing municipalities are facing criticism and have been accused of failing to perform their oversight responsibilities and act against underperforming officials. The Auditor-General of South Africa (AGSA), Tsakani Maluleke, took mayors to task amid revelations that many municipalities in the country are poorly managed. She recently tabled her report on the outcomes of municipalities for the 2024-2025 financial year. The report revealed that only 41 of the country's 257 municipalities achieved clean audits. The AGSA said the performance of municipalities reflected the tone set at the top by those appointed to lead them, adding that mayors contributed to the malaise by failing to perform oversight on officials. Maluleke highlighted during an interview that mayors had responsibilities and powers vested in law. The Structures Act details the responsibilities of the mayor, which include financial responsibility. The mayor is designated as the 'councillor responsible for financial matters', including preparing and submitting the draft budget to the council, national/provincial treasury, and other relevant bodies. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Addressing the issue of audit outcomes, Maluleke said the law stipulates that it is the mayor who is supposed to monitor the implementation of the approved performance plan. The mayor is also responsible for monitoring budget expenditure and ensuring that the municipal manager puts in place the controls that will safeguard the existing budget. 'What we are reporting is that unfunded budgets continue to be approved by councils. Even when budgets are approved, you still end up with unauthorised expenditure because people are spending beyond what was initially approved. It is the mayor's job to oversee and take action, yet they don't,' she said. Maluleke noted that when the agreed performance fell short, there was often no action taken. 'People are not held accountable; the municipal manager is not held accountable. It is the mayor who must drive these matters, and the speaker and the council must ensure that these things are done. The individuals responsible for oversight are those who come through the political system,' she added. The AGSA cited the uMshwathi Local Municipality in KwaZulu-Natal as an example of improvement in audit outcomes, attributing part of this success to the hiring of a competent financial manager who had the support of the municipal manager and the political leadership. Mandla Zondi, the mayor of uMshwathi Local Municipality, acknowledged that mayors had a critical role to ensure the performance of the municipality. 'In our case, each quarter we review the agreed performance indicators to assess how the municipality is performing. If those are not met, we engage with them, even bringing in experts from Cogta to assist. We also closely monitor how the municipality's funds are being managed each month,' he said. Speaking on their improving performance, Zondi attributed it to a lack of interference: 'We politicians stick to our lane; we make the policies and allow the municipal manager and his staff to implement the work,' he added. Msunduzi mayor Mzimkhulu Thebolla said a distinction should be made between the executive mayoral system and the executive committee (Exco) members' mayoral system. 'The executive mayor has the power to appoint the people that they lead the municipalities with – they essentially have a cabinet that works with them, giving them more influence in that they pull in the same direction.' He said mayors and councils had a single point of influence and accountability in that they only appointed the municipal manager, who then appointed his staff. 'If the municipal manager is not performing, the mayor can take action and make recommendations to council to take action. If there is a manager that is not performing, we expect the municipal manager to take action. If the municipal manager does not, then we take action against the municipal manager.' EThekwini mayor Cyril Xaba agreed with the AG, saying as a political leader of a political entity, mayors had to set the right tone.'We are part of the system to improve transparency and ensure accountability in the exercise of our mandate as the municipality, which includes the mayor in our city because we are a collective. 'The mayor and Exco should ensure we attend to matters the AG raises, work with the city manager to deal with repeat audit findings to the extent the city manager has developed an audit action plan, and report on progress they are making on all audit queries, not only by the Auditor-General but by our own audit unit,' he said. Local government expert Mike Sutcliffe noted that mayors, whether executive or Exco, had substantial powers, particularly regarding oversight under the Structures Act, especially when it came to addressing issues of oversight. THE MERCURY
Eyewitness News
2 days ago
- Business
- Eyewitness News
AG says Treasury's Eskom Municipal Debt Relief Support Programme has been a failure
CAPE TOWN - The Auditor General (AG) says Treasury's Eskom Municipal Debt Relief Support Programme has been a failure. Delivering the 2023-24 local government audit outcomes to Parliament on Wednesday, Tsakani Maluleke listed unfunded budgets, mismanaged indigent programmes and failed infrastructure projects as among the many problems plaguing municipalities. But overall, Maluleke said a lack of accountability, especially politically, means the problems are likely to persist. Maluleke said 113 municipalities are currently operating on unfunded budgets. At least 80% of this number are doing it for the third consecutive year. "So, what happens, you end up with a deficit, and an overdraft situation, you don't pay your creditors, and you keep try covering this hole every single year." The situation is worsened by unauthorised expenditure from money the municipality doesn't have or has borrowed. On average, creditors are waiting 286 days to be paid for services rendered to municipalities. Maluleke said a lack of discipline means settlement arrangements between municipalities and Eskom are also not being honoured. "It's not working. 84% of the municipalities that participate in that programme are not complying with the conditions they subscribed to." She added that municipalities are providing indigent relief to their own staff, suppliers to the municipality, and even the deceased, while those in need are missing out. ALSO READ: AG concerned that metros not improving in their audit outcomes
IOL News
2 days ago
- Business
- IOL News
A-G highlights stagnation in municipal audit outcomes
Auditor-General Tsakani Maluleke says while 59 municipalities have improved their audit outcomes since 2020/21, 40 have regressed in the 2023/24 financial year. Image: Supplied Auditor-General Tsakani Maluleke has found that the trend of poor audit outcomes continued in local government, with only 41 municipalities obtaining clean audits in the 2023/24 financial year. 'While 59 municipalities have improved their audit outcomes since 2020/21 (the last year of the previous administration), 40 have regressed,' said Maluleke. She tabled the 2023/24 general report on the local government audit outcomes in Parliament on Wednesday. Maluleke also said the most prevalent audit outcome in 2023/24 was an unqualified audit opinion with findings on performance information and/or compliance, received by 99 municipalities. 'While the audit opinion on the financial statements of these municipalities may be unqualified (unmodified), meaning that their published financial statements are credible, the material findings on performance information mean that their performance reports are not credible, while the material findings on compliance signal continued disregard for legislation or significant lapses in control. 'These 99 municipalities could easily lose their unqualified status if they do not address the remaining challenges in their control environment.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Of the 99 municipalities that received unqualified audit opinions, 71 failed to submit quality financial statements and relied on the audit process to correct the errors identified by the auditors. Of the eight metros, four received unqualified audit opinions, after only three submitted quality financial statements for audit. Maluleke said municipalities continued to spend significant financial resources on hiring consultants to assist them in preparing financial statements for audit. 'In 2023/2024, 219 municipalities spent a combined R1.47 billion on financial reporting consultants, with 130 of these municipalities still submitting financial statements that had errors in the areas where consultants did work, indicating that the spending was not effective. 'We included a similar message on the ineffective use of financial reporting consultants in our 2013/14 general report. Little has changed in the decade since then.' Maluleke added that 25 municipalities have sustained their clean audit status every year since at least 2020/21 and encouraged those that lost their status to swiftly address the root causes of the regressions so that they can achieve a clean audit once again. However, the report showed that 13 municipalities did not submit their financial statements for auditing by the legislated date. Seven of the affected municipalities, of which five are in the Free State, habitually disregard the legislated requirement and submit their financial statements late every year or do not submit them at all. The AG's report also showed that 113 municipalities operated with unfunded budgets and 285 material irregularities with an estimated financial loss amounting to R8.7 billion were identified. 'We also identified 79 material irregularities that were causing substantial harm to local government accountability processes and financial health, and a further 80 material irregularities that were causing substantial harm to the public due to action or inaction by municipalities, most of which related to pollution of water sources (56) and mismanagement of landfill sites (20).' She observed that the number of material irregularities increased every year. 'The material irregularities process is not having the desired impact in local government, due largely to instability in accounting officer positions; a slow response by accounting officers to our notifications, recommendations, and remedial action; prolonged investigations or delays in concluding criminal proceedings; and delays in disciplining officials. 'Where we escalate the non-responsiveness to mayors and provincial government leaders, it is rare for them to act or for their actions to have a significant impact.' The A-G also called on local government to use its remaining year in office to provide effective and efficient governance and service delivery to improve the lives of Africans. Maluleke noted with concern that action has been too slow and has had little impact on the lived realities of South Africans, despite the commitment made when she called them to work with urgency to overhaul the local government.
Daily Maverick
3 days ago
- Business
- Daily Maverick
Auditor-General sounds alarm on governance crisis in SA's biggest cities, gives Cape Town the thumbs up
Of South Africa's eight metros, only Cape Town was given a clean bill of health by the Auditor-General. Johannesburg, eThekwini and Ekurhuleni received unqualified audits with findings. Buffalo City, Tshwane, Mangaung and Nelson Mandela Bay all received qualified audit opinions with findings. Only 16% of South Africa's municipalities can be trusted to spend public funds effectively — and they account for just 19% of the municipal expenditure budget, says Auditor-General (AG) Tsakani Maluleke. 'The good news is that we are back to 41 clean audits, which is where we started back in 2020-21, so we're no longer at the 34 that I talked about last year,' Maluleke told MPs in Parliament. 'However, that makes up 16% of the municipalities across the country. That tells you that only 19% of the municipal expenditure budget is being spent by municipalities that will predictably give you the outcomes you hope for, in that they have the disciplines and governance arrangements for you to trust that whatever money you send there will be spent in the way that you expect,' she continued. Maluleke revealed the dire state of local councils in her 220-page report on the 2023-24 local government audit outcomes, tabled to Parliament's Cooperative Governance and Traditional Affairs (Cogta) committee on Wednesday. In the lead-up to the 2026 local government elections, the state of South African municipalities is shocking: 'While 59 municipalities have improved their audit outcomes since 2020-21 (the last administration), 40 have regressed,' according to Maluleke. 'The messages in the last three general reports of the Auditor-General of South Africa (AGSA) have been aimed at the local government administration that took office in 2021 — the mayors, speakers and council members who were elected to represent their communities. We called on them to work with urgency to overhaul a local government characterised by insufficient accountability, failing service delivery, poor financial management and governance, weak institutional capability and widespread instability. 'Despite the commitments made in response to these calls, action has been too slow. Based on the overall audit outcomes in 2023-24, the results from the detailed work that we performed at metropolitan municipalities and local municipalities with repeated disclaimer audit opinions, we can only conclude that little has changed and that local government continues to be in a dire state,' she said. MFMA Report 2023-24 by victoria on Scribd The number of municipalities with disclaimed audit opinions (the worst audit opinion) has decreased from 15 to 14. This is down from 28 in 2020-21, following the local government elections. 'The good news is that the disclaimers are continuing to [decrease]. That is credit to the provincial leadership in most of the provinces that have taken it upon themselves to support new municipalities to come out of disclaimer,' said Maluleke. 'We had 28 disclaimers [in 2020-21], we're now sitting at 14. It's still 14 too many.' She said disclaimer audit opinions were 'undesirable and intolerable', particularly when they related to an individual or an institution that was looking after public funds. Metros deteriorate In 2023-24, metros and their municipal entities were responsible for providing services to 8.9 million households (46% of households in SA) and managed 57% of the estimated local government expenditure budget, according to the AG report. With big budgets and more capabilities, one would expect South Africa's metros to have positive audit opinions. But, Maluleke said, 'the overall audit outcomes of metros have continued to regress since 2020-21' 'The metros, in our view, need particular, urgent attention if we are to get them to become the centres of economic growth and the centres that will make the lives of South Africans better. Right now, it would appear that we don't yet have that.' The City of Cape Town was the only metropolitan municipality to receive a clean audit in 2023-24, while the City of Johannesburg, eThekwini and Ekurhuleni received unqualified audits with findings. Buffalo City, Tshwane, Mangaung and Nelson Mandela Bay all received qualified audit opinions with findings. 'The continued weakening of these metros over time has led to a situation where their financial health has deteriorated — many of them continue to be downgraded, three of them just this year,' she said, adding that it had also led to a situation where their infrastructure projects were not well-managed. Maluleke singled out Tshwane and Johannesburg for not budgeting adequately for the maintenance of their assets. 'The weakening of these institutions is something that we need to arrest — courageously, boldly and urgently so.' Maluleke questioned whether the leadership of these metros included 'the type of people that are equal to the task'. Unfunded budgets The AG told MPs that the 'culture of approving unfunded budgets remains a problem'. In the 2023-34 financial year, she said, 113 municipalities (44%) approved unfunded budgets. Of the 113 municipalities, 86 had approved unfunded budgets for the past three years. 'This [is] despite the fact that the provincial treasury would've reviewed the budget and given advice, or the National Treasury for metros would've given advice. Municipalities continue to approve unfunded budgets. 'It's become a culture,' she said. Maluleke said that when these unfunded budgets were approved, her office still saw unauthorised expenditure. According to her report, the biggest contributors to unauthorised expenditure in 2023-24 were the City of Johannesburg (R2.76-billion), City of Tshwane (R2.15-billion) and Nelson Mandela Bay (R1.44-billion) Accountability ecosystem 'Every single public institution doesn't operate as an island,' Maluleke told MPs. She said that 'beyond the boundaries' of councils, there were responsibilities that lay with the legislature and administration at provincial level. 'When we look at the governance arrangement within the country, we are convinced that if every single player in this ecosystem of accountability did their part well and consistently so, and if every single player was seized with ensuring that they collaborate and cooperate properly, we would have very few governance problems — unlike the situation right now,' she said. It was up to the provincial leadership, including the provincial treasury, Cogta and premiers, 'to set the tone around what is tolerated'. That being said, the role of mayors cannot be understated, according to Maluleke. 'The role of the mayor and the speaker are very important. When mayors do their part, things run well, and when they fail to do their part, things do not run so well.' DM
