Auditor-General Kimi Makwetu’s report released in Parliament Wednesday shows that municipal irregular expenditure has increased from R16.2 billion to R28.3 billion, up by 75%. The Eastern Cape tops the list of defaulting provinces with R13.5 billion, followed by the North West and Gauteng. The Free State, Limpopo and North West municipalities have not received a single clean audit!
“We are drawing attention to the vulnerable financial position of municipalities, where 31% per cent of the municipalities, which represent 73 of them, disclosed in their financial statements that they might not be able to continue operating.”
“Although they have to continue operating, they are reporting that they are in a vulnerable financial position at the end of the financial year, that was June 2017. Meaning that when they looked at their finances and analyse their financial commitments, as well as those that they are still to make, they find that they are not going to have the necessary cash resources to continue to pay for the things that they ought to pay for.”
Member of Parliament Vincent Smith says a Parliamentary committee that is tasked with overseeing the office of the Auditor-General has approved an amendment to legislation that will give the AG’s office more teeth.
As Auditor-General Kimi Makwetu released the audit outcomes for municipalities for the financial year 2016/17 at the Imbizo Centre in Cape Town on Wednesday, Smith said the committee approved amendments to the Public Audit Act on Tuesday for submission to the National Assembly, where if passed, would be referred to the President for enactment. The aim is to ensure that the amendment is approved by Parliament before the end of the current term of office.
“I can report today that yesterday, the committee approved the amendments to the Public Audit Act,” he said.
The announcement comes after concerns over the years that the Office of the Auditor-General lacked the powers to take matters further than his audits.
The amendments, once finalised by Parliament and signed off by the President, will give the Office of the Auditor-General powers to refer material irregularities to law enforcement agencies and appropriate authorities for investigation.
This will include any non-compliance with legislation, fraud or theft, or a breach of fiduciary duties that causes or is likely to cause a material financial loss, the misuse or loss of a material public resource.
The amendments will also give the Office of the Auditor-General the powers to issue a directive to recover any money that is lost as a result of the irregularities.
“We are also giving the Auditor-General the authority to issue a certificate of debt against the accounting authority,” he said.