Municipal managers’ salaries will be regulated, the government says, after the DA pointed out that managers of poor-performing municipalities were earning massive paychecks — and bonuses.
On Tuesday the Democratic Alliance said that the municipal managers of the 147 municipalities that had failed financial audits each received annual salaries of R1-million.
The deputy minister of cooperative governance, Yunus Carrim, responded, saying his department was working with the South African Local Government Association (Salga) and the treasury to help municipalities use their money “productively and effectively”.
“We are setting ceilings for paid remuneration and conditions of municipal managers,” Carrim told reporters in Cape Town.
It was, however, “unconstitutional” for national government to prescribe “an exact amount” of remuneration for a municipal manager.
“What we are seeking is to provide guidelines which will say for example that depending on the number of residents in the municipality, this is the budget you have and these are the guidelines we give you. You can then provide a ceiling and monitor.”
Carrim said there had been consensus with unions, among others, on municipal remuneration regulations.
His department was also seeking to set minimum qualifications for senior managers, such as experience, expertise and technical qualifications.
According to the DA, 56 municipal managers were paid performance bonuses in the last financial year despite presiding over poor municipal performance.
“In total, R249-million (including performance bonuses) was paid to municipal managers last year,” the DA said in an analysis based on figures released by the Treasury.
The DA’s spokesperson on cooperative governance and traditional affairs, James Lorimer, told the Mail and Guardian that municipal councillors usually decide on whether their mayor gets a bonus or not.
The DA found that 56 municipalities that received negative audit outcomes for poor financial management had nevertheless awarded their municipal managers performance bonuses.
The Auditor General audits municipalities’ finances on a yearly basis. Many of the municipalities in which managers received bonuses received the worst rating known as a ‘disclaimer’.
This means the financial documentation required to trace how municipal funds were used was not even available.
The Mangaung municipality, which includes Bloemfontein, received a disclaimer on its audit — reflecting concerns with the municipalities financial management — but its manager earned a total salary package of R2Â 015Â 024, the DA said. The manager also received the highest bonus of R335Â 877 and Mangaung’s chief financial officer (CFO) got a R277Â 418 bonus.
Lorimer said seven executives in Mangaung also paid themselves more than R2-million in total.
In all but three of these municipalities that received negative audits on their financial affairs, the chief financial officers were awarded performance bonuses as well.
Of the 283 municipalities in the country, a majority 147 of them received negative audit outcomes. The other 136 received positive audit outcomes.
Of the 147 municipalities with negative outcomes, 56 paid performance bonuses averaging R98Â 000 for each municipal manager.
These non-performing municipal managers earned on average a total income of R1-million each. The CFOs of these failing municipalities were paid on average R80Â 000 in performance bonuses as well, the party said. — Additional reporting by Katharine Child
In a previous version of this story we incorrectly attributed the first comment by the DA’s spokesperson on cooperative governance and traditional affairs, James Lorimer, on who decided to award bonuses, to Wits politics Professor Anthony Butler. The Mail & Guardian regrets the error and offers both Mr Lorimer and Prof Butler its apologies.