No clean audits for Free State municipalities

Not a single Free State municipality achieved a clean audit last year, partly because 39% of chief financial officers were deemed incompetent, according to the auditor general.

There was R3.54-billion that could not be accounted for owing to unauthorised, irregular or fruitless and wasteful expenditure.

This information is contained in the auditor general’s General Report on the Audit Outcomes in the province.

It said the financial health of the province at a local government level had deteriorated significantly during 2013-2014.

The net current liability position of local Free State municipalities, which are primarily responsible for service delivery, is R2.4-billion.

According to the report, there are three main reasons for this situation: Key officials lack appropriate competencies, management responds slowly to warning signals and there are no consequences for poor performance and transgressions.

All 27 municipalities made use of consultants for financial reporting at a cost of R130-million. The auditor general said all these services were functions that should have been performed by the chief financial officers and their finance teams.

The main reason for the high use of consultants is a combination of a lack of skills and the vacancies within municipalities for financial and performance reporting.

Only 61% of chief financial officers were deemed competent and consultants were necessary to compensate for the lack of skills and vacancies in the finance units.

At the root of the problem lies municipalities’ poor revenue collection. Consumers owe local municipalities in the province R9.1-billion for services. But 75% of this amount had been deemed irrecoverable, so only R2.3-billion is expected to be recovered.

These results are despite Operation Clean Audit, which was announced in 2009 in Parliament and expected 100% of local governments to achieve this status by 2014. –

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