Auditor-General Kimi Makwetu recently released the audit results for South Africa’s municipalities for the 2016/17 financial year, which indicate that irregular and fruitless and wasteful expenditure has increased by 75%, from R16 212 billion in the previous year to R28 376 billion in the year under review. Consulting Engineers South Africa (CESA) believes that the main reason for the increase is the continued non-compliance with supply chain management regulations and lack of consequences for the mismanagement thereof.

CESA CEO Christopher CampbellIn a statement, CESA says it is concerned with the increase in irregular expenditure, and remains committed to partner with government and the Auditor-General Office to help resolve the situation. “While CESA acknowledges the significant effort made by Municipalities in 2016-17 to identify and transparently report on irregular expenditure incurred in previous years, the organisation believes that there still remains a lot to be done,” the statement says.

The South African Municipal Workers’ Union (Samwu) has also said it is concerned about the regression in municipal audit outcomes. “Samwu is further concerned by the lack of political will by municipalities to investigate the findings of the auditor-general’s on irregular, fruitless, unauthorised and wasteful expenditure. We therefore welcome proposals by the Standing Committee on Public Accounts (Scopa) to strengthen the powers of the office of the auditor-general to refer some findings to law enforcement authorities, and of issuing a certificate of debt to municipal management to be held personally liable for wasteful and unauthorised expenditure,” says Simon Mathe, Samwu’s General Secretary.

According to CESA CEO Chris Campbell, National Treasury’s Standard for Infrastructure Procurement and Delivery Management (SIPDM) is the model for Infrastructure delivery that should be implemented by all spheres of government to ensure compliance and adherence to best practice, but that someone needs to take ownership and be accountable for it. “CESA is alarmed that since the adoption and implementation of this procurement system there is still no Infrastructure Directorate at National Treasury that is taking ownership and accountability for the implementation and monitoring of compliance with this Standard,” he explains.

“There are no in-house Infrastructure specialists in either the offices of the Chief Procurement Officer or that of Auditor General. The lack of appropriate skills in both these departments needs to be addressed urgently if the ‘Value for Money’ consideration of an annual R300-Billion spent on infrastructure is to materialise. This becomes all the more imperative with the significantly reduced budget available for infrastructure development.”

Of the audited municipalities, 45 regressed and 16 improved. Only 33 municipalities (13%) received clean audits having produced quality financial statements and performance reports and complied with key legislation.

“The SIPDM programme was designed to migrate the emphasis away from administration and focus on governance and leadership. This will ensure that infrastructure is delivered with the correct knowledge and competence.  It is this efficiency and effectiveness that needs to be the current focus of government, in particular National Treasury,” Campbell concludes.


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