A performance audit of the South African Local Government Association (Salga) by Auditor General Shauket Fakie has shown that it was owed 71% of its total levies by municipalities — a total of R135,3-million — by the end of the 2004/05 financial year.
At the same time, the organisation — which the report notes is an association of municipalities ”that is at the cutting edge of quality and sustainable services” — hiked its salary budget between 2004/05 and 2005/06 from R39-million to R49,4-million, an increase of R10,4-million or 27%.
The report said that 6% of the latter represented the annual salary benchmark adjustment, which left an amount of about R8-million available for vacant positions.
”No information was obtained as to which vacant positions had been identified as priority,” said the report.
The report, tabled at Parliament on Tuesday, noted that 39% of the approved positions were filled — only 181 posts out of 295. It also reported that the remunerations and benefits policy was analysed from a sample of 40 employees and it was determined that 25 of them were being remunerated ”outside the approved salary framework”.
Fakie reported that the non-payment of levies ”would have impacted negatively on the organisation’s ability to fulfil its goals and objectives that had been set”.
However, he reported that the Salga accounting officer had reported that the management of outstanding debt had ”improved tremendously” since the introduction of a new management formula in 2005/06 and by December last year 95% of the budgeted membership levies were collected.
The AG reported that Salga operations were funded from three sources — government grants, donor funding and levies from members (municipalities). The majority of the income was from the latter source (levies raised against its members).
The report noted that Salga reported gross revenue of R111,4-million in 2005, as at end of June — up from R97,3-million the previous year. Operating expenses were R104,9-million in 2005 compared with R99,8-million in 2004. Operating income was R6,4-million in 2005 against a deficit of R2,4-million in 2004.
Interest received was R906 154 in 2005 compared with R1,1-million the previous year.
Meanwhile, Democratic Alliance MP Mpowele Swathe said in a statement on Tuesday that the DA had requested Minister of Provincial and Local Government Sydney Mufamadi ”to urgently resolve the crisis” at Salga.
”In a letter sent to the minister, the DA has asked what steps he will take to sort out Salga’s ongoing management and financial problems.”
The auditor general’s latest findings on management deficiencies at Salga mirrored the AG’s report on Salga’s finances tabled in Parliament in May, said Swathe.
At that point, Swathe noted, the AG could not express an opinion on Salga’s financial statements because, amongst other things, R74-million had not been disclosed in Salga’s financial statements.
He said Salga was constitutionally mandated to enable local government to fulfil its developmental role, ”yet Salga itself is failing to keep its head above water. What chance do municipalities have if one of the main drivers of municipal development can not function effectively?”
Swathe said he had asked the minister to initiate a recruitment drive to fill the vacancies, ensure that Salga employees were paid according to the approved salary framework and to hold back additional funding for Salga ”until it sorts out its financial controls”. — I-Net Bridge