Municipalities spend R29m on finance consultants

This was revealed in the auditor general's report for the 2011/12 financial year, and raised the ire of North West Premier Thandi Modise.

Modise believes the millions spent on consultants just to prepare financial statements "do not commensurate with minimal improvement that they [municipalities] have registered", the premier said in a statement on Tuesday.

A representative of auditor general Terence Nombembe's office briefed Modise about the latest report on Monday.

In addition to this, only five out of 24 municipalities – four district and 19 local – in the province received unqualified audit reports.

Modise is particularly unhappy that municipalities in the province are not taking action against those responsible for poor performance and transgressions. Several forensic reports have identified officials found guilty of corruption and mismanagement of funds, but there has not been any political will to take action against them.

"Municipalities should crack the whip on nonperformers because pervasive root causes for poor audit outcomes, such as loss of documents and deviations from supply chain management processes, are recurrent," she said in a statement on Tuesday.

It cannot be "business as usual" when every year the province's municipalities perform poorly in financial management, Modise said.

"They need to take bold steps to fill critical vacancies and employ skilled and competent senior managers in order to accelerate and deliver quality services to our people."

Clean up
Since her appointment as North West premier in 2010 Modise has been emphasising the need to clean the province's financial books, with municipalities requiring urgent attention. The North West is a generally poor province, made mainly of rural villages that struggle with water provision, sanitation and also electricity in some areas. Even the province's townships and few urban areas are not immune to the challenges.

But there has been some improvement in the latest audit report, all 24 municipalities submitted their financial statements. Modise believes this is the result of intervention by the provincial treasury and the department of local government and traditional affairs.

Currently three local municipalities – Ditsobotla in Lichtenburg, Matlosana in Klerksdorp and Maquassi Hills in Wolmaransstad – are under administration by the provincial government in efforts to get them on track to effectively manage their finances.

The unnecessary use of consultants has been identified as one of the serious concerns in all spheres of government because consultants are often used even where there are people permanently employed to do the same job.

Public Service and Administration Minister Lindiwe Sisulu said she would clamp down on the misuse of consultants by government.

Last year, none of the 24 municipalities and four municipal entities in the province received a clean audit for the second consecutive year. Fifteen municipalities either submitted their financial statements too late or not at all.

Nombembe was so displeased that he said the local government leadership in the North West "does not take the message from my office seriously".

According to the AG, the province has deteriorated in five critical areas: supply chain management, predetermined objectives such as service delivery, human resource management, information technology controls, and material errors and omissions in municipalities' financial statements.

The AG will release the latest reports to individual North West municipalities on Thursday 18 April.

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Mmanaledi Mataboge
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