Latest news with #OfficeoftheAuditor-GeneralSA
IOL News
19-05-2025
- Business
- IOL News
KZN municipalities overspend budgets but fail to achieve service delivery targets
Officials from the Office of the Auditor-General SA met with members of the Scopa committee at the KwaZulu-Natal legislature this week to give a detailed briefing on the state of municipalities. Image: Independent Newspapers Archives The Standing Committee on Public Accounts (Scopa) in KwaZulu-Natal is demanding answers on how municipalities are spending their budgets following concerns that the spending does not align with service delivery. The spending habits of some municipalities were flagged recently by the Office of the Auditor-General of SA (AGSA) during its meeting with Scopa in the KZN legislature. The AGSA revealed that some municipalities are spending their way into ruin, indicating that some of them often allocate a portion of next year's budget in the current financial year. Members of the committee stated they are waiting to receive a proper breakdown from the AGSA on how these municipalities are spending their budgets before addressing the matter with the municipalities. Nomalungelo Mkhize of the AGSA office in KZN said, 'It is important that there is useful, reliable reporting and performance planning for municipalities because it shows that one knows where they are insofar as service delivery is concerned and what needs to be done going forward.' 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. 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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. Next Stay Close ✕ She noted that the AGSA found that in most municipalities, not all performance targets were met, even though the majority of the budget was spent. She stated that they found that 26% of municipalities had reported achievements that were not reliable, with indicators and targets that were not well-defined or measurable. Some excluded indicators that measure performance in their core mandated functions. The AGSA office found that it was only the Zululand District Municipality that had spent its budget and achieved 100% of its targets. She said the reasons for the non-achievement of targets in municipalities include delays in the supply chain management process, poor performance from contractors, inadequate project management, weak financial controls, and insufficient resource planning. Mkhize added that the budget is spent without correlation to the targets achieved. In one municipality, 100% of the budget was spent, but only 62% of the targets were achieved. In another municipality, they overspent on their budget and only achieved 20% of their core service delivery targets. 'Despite spending the majority of the budget, the key service delivery targets were not achieved,' said the AGSA official. She said in one of the big municipalities in the province, an improvement has been noted in the percentage of targets achieved, increasing from 74.58% to 83.93% in the current performance period. 'However, the non-correlation of targets achieved and budget spent remains a concern, as fiscal pressures require a more efficient approach to service delivery.' The non-achievement of key service delivery targets poses significant risks relating to insufficient access to water, sanitation, electricity, and waste management services, leading to deteriorating living conditions. Residents and communities may lose trust in local government, leading to protests, service delivery strikes, and civil unrest. Additionally, there is a lack of consequences for officials who fail to achieve key service delivery targets, the report by the AGSA added regarding this matter. Tim Brauteseth, the chairperson of the Scopa committee, said they are concerned about the situation and will soon be demanding answers from municipalities. He said despite substantial budgets, key service delivery targets are not being met. This is particularly evident in infrastructure projects, where delays, cost overruns, and substandard work are common. 'A closer study of this situation reveals that in one district municipality, they spent 113% of (their) budget and achieved only 20% of (their) targets. Another spent 100% and only achieved 32%, while another overspent its budget by 120% and underachieved at 54%.' He said as part of KwaZulu-Natal's (KZN's) Government of Provincial Unity (GPU), the DA will insist that municipal leadership prioritise effective budget management and ensure that funds are allocated and utilised efficiently. He added, 'There must be a stronger focus on planning, monitoring, and executing infrastructure projects to avoid delays and cost overruns. Additionally, maintenance budgets must be adequately funded to ensure the sustainability of existing infrastructure. 'We call on all stakeholders, including municipal leadership, the Auditor-General, and oversight bodies, to take immediate and decisive action to address these issues. 'There must be a culture of accountability and transparency within our municipalities to ensure that public funds are used effectively to improve service delivery and the quality of life for all our province's people,' he concluded. THE MERCURY
IOL News
15-05-2025
- Business
- IOL News
Scopa members slam KZN municipalities for spending over R200 million on consultants
Officials from the Office of the Auditor-General SA met with members of the Scopa committee at the KwaZulu-Natal legislature this week to give a detailed briefing on the state of municipalities. Image: Independent Newspapers Archives KwaZulu-Natal municipalities have spent over R200 million on consultants, raising concerns about skills transfer and the effectiveness of these expenditures, according to the Auditor-General. Municipalities in KwaZulu-Natal paid consultants more than R200m to perform work that should be done by the staff of the municipalities. The Office of the Auditor-General of South Africa stated that while the figure had declined by almost R20m from the previous year, it was still high. The revelations angered some members of the Standing Committee on Public Accounts (Scopa) who expressed that this was clearly an ineffective use of consultants and demanded to know which municipalities were implicated in this conduct. Even more concerning for the Auditor-General (AG) is that when consultants are hired, there is no skills transfer that takes place between them and the municipal employees. The Mercury learned from some Scopa members that monthly reports about the state of the municipalities paint a picture that is not improving. AGSA staff in KwaZulu-Natal met with members of Scopa in the provincial legislature to provide a detailed briefing on the audit outcomes for the 2023-2024 financial year. 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 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. Next Stay Close ✕ The issue of the use of consultants has been a constant complaint, especially since the work of the consultants should be performed by staff working for those municipalities. In a briefing on the matter, the AGSA in the province said the amount spent on consultants had decreased from R240m to R220m, but it was still high. Nomalungelo Mkhize, the AGSA official responsible for the office in KwaZulu-Natal, highlighted the issue of consultants. 'There are still a number of municipalities that continue to use consultants for financial reporting in areas such as asset management, preparation of fixed asset registers, review of financial statements, and tax services. Many are being appointed due to a lack of skills, vacancies, or a combination of both. 'We have seen municipalities that have been recurrently appointing consultants, which raises questions about whether the consultants, as part of their work, are actually transferring skills or not. We have found that the process of skills transfer is not happening at some of these municipalities, and therefore year on year, there are consultants appointed to do the work that should be done by the municipality.' She added that sometimes the consultants' work contains material misstatements. 'So, municipalities are calling in experts to do the work, and we are still finding mistakes in the work that the consultants are meant to be assisting the municipalities with. Yes, at times the consultants are taking on work that they may not be able to complete with quality standards, for various reasons.' 'We are also finding that where consultants are placed in a municipality, they are not being monitored. They do not monitor whether they are delivering on what they are contracted for; sometimes they are appointed too late and cannot deliver on what they had been appointed to do, but the payment still goes through,' said the AGSA official. Chair of the Scopa committee, Tim Brauteseth, said the revelations meant there was an ineffective use of consultants: 'We are told that there are municipalities where there are no skills transfers; which are those municipalities?' he questioned. 'This is really concerning. There are instances where municipalities require specialised skills, and you bring in consultants before general financial reporting. We really should be using our own staff members. 'What is worse is that we are not even getting value for money because the work these consultants are producing still has misstatements,' said Brauteseth. Another Scopa member, Lourens De Klerk, said it's baffling that highly educated and highly paid officials are relying on consultants. 'These are highly paid and supposedly highly qualified people, yet they are hiring consultants. What this says is that these people simply cannot do the job. 'By hiring consultants, they are implicitly admitting that they cannot do the work, and they should either resign or be fired. We all know the state does not have money, yet these municipalities are hiring consultants.' THE MERCURY
