Financial reports slam rot in system
Gauteng municipalities have racked up more than R245-million in wasteful, fruitless, irregular and unauthorised expenditure
FINANCIAL reports tabled before a delegation of the National Council of Provinces have painted an unflattering picture of Gauteng municipalities.
The reports, presented to NCOP delegates in the provincial legislature last week, revealed that municipalities in South Africa's economic hub racked up more than R245-million in wasteful, fruitless, irregular and unauthorised expenditure.
A draft report by the NCOP laid the blame squarely on the lack of accounting oversight by political leaders as well as a rot within the municipalities' supply chain divisions, through which tenders were awarded.
Among some of the worst offending municipalities which presented their financial reports were: Sedibeng district municipality (R88-million); Randfontein local municipality (R53-million); Ekurhuleni (R14-million); City of Tshwane (R13-million) and Merafong local municipality (R13-million).
The City of Johannesburg, according to its own submissions, racked up R48,498,000 in unauthorised expenditure due to exceeding its approved budget.
Irregular expenditure topped R397-million while material losses owing to fraudulent activities, electricity distribution losses and unaccounted for water amounted to R6.2-million, R1.2-billion and R827-million respectively. Technical losses and loss due to theft, tampering and faulty meters came to R568-million and R649-million respectively.
The DA-led Midvaal municipality incurred irregular expenditure amounting to R36,000 because a report containing the figure was "submitted late by one day as a result of late filing of necessary documents by the contractor".
The NCOP report showed that Midvaal "has an effective and efficient supply chain management unit which is fully functional ."
However, Midvaal also incurred material losses of R12,430,808 and R3,113,860 arising from electricity and water losses, respectively.
The municipality wrote off R12,537,267 while also identifying "low productivity and high turnover of staff, theft or misuse of council property as well as overspending" among its top 10 risks.
The report blamed "ineffective supervision", "non-existent or dysfunctional audit committees and accounting officers not fulfilling duties and responsibilities" as the major causes of irregular, fruitless and wasteful expenditure.
NCOP delegates recommended that the MEC for local government [Humphrey Mmemezi] together with mayors should strengthen their oversight role in ensuring there is compliance with legislation and that "political and administrative leadership should ensure that there is compliance with supply chain management policies".