This assessment in a newly released report by the Auditor General of South Africa’s (AGSA) comes as no surprise, says the The Organisation Undoing Tax Abuse (OUTA).
According to Julius Kleynhans, OUTA’s Operations Manager for Local Government, it is “simply appalling that only 8% of our municipalities received clean audits and that R21,2 billion was accounted for as irregular expenditure. Provincial oversight and interventions are not working because of political interference and the lack of holding transgressors to account. The new Minister of CoGTA, Nkosazana Dlamini Zuma, and the newly appointed MEC’s must fix the situation in local government if they want to save our country from a complete collapse and OUTA is willing to assist government with this turn-around in municipalities.”
He said municipalities form the lifeblood of South Africa. “It’s where we work, live and create a life. If it fails, the country fails. Hence, we need to do everything in our power to ensure it succeeds.”
According to Godfrey Gulston, OUTA’s CFO and Local Government Financial Analyst, OUTA’s engagement in various municipalities has revealed that the management and accounting skills of municipal managers and CFO’s is sorely lacking, giving rise to a lack of understanding and basic knowledge of how to run these vital institutions. “There seems to be a culture of entitlement among some municipal staff that they have been elevated to officials rather than public servants and this must be stopped. External influences of exorbitant costs by ESKOM, Water Boards, SAMWU and SALGA makes services unaffordable. This leads to payment defaults that creates cash flow issues, which hamper the ability to pay suppliers and in effect drains cash reserves.”
Dire lack of spending on maintenance
In addition, OUTA is seriously concerned at the lack of action or knowledge of the root causes of municipality’s problems by the Provincial MEC’s of Treasury and CoGTA. There has been a dire lack of spending on maintenance and repairs by most metros and municipalities over the past decade. This is now giving rise to the collapse of infrastructure and the resultant sewage spilling onto our streets and into our rivers, causing deteriorating water quality. Not to mention decay of roads, bridges and other vital structures for local economies. Adding to the problems are hundreds of transgressions of procurement which has led to rampant corruption. Whilst salaries are somewhat guaranteed and ever increasing regardless of performance, radical intervention is needed to restore customer service and ensure the people get the best value for their rates and taxes.
“It’s time for a change of municipal management processes and structures and we call on the President to set up an urgent ‘Local Government Summit’, at which the issues of transparency and accountability at local government needs to become the order of the day,” says Gulston. “If we don’t get fast improvements into the management of our municipalities, there will be more community revolts with the potential to result in a total collapse of some municipalities.”