Scopa members slam KZN municipalities for spending over R200 million on consultants
Expenditure questioned
Officials from the Office of the Auditor-General SA met with members of the Scopa committee at the KwaZulu-Natal legislature this week to give a detailed briefing on the state of municipalities.
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KwaZulu-Natal municipalities have spent over R200 million on consultants, raising concerns about skills transfer and the effectiveness of these expenditures, according to the Auditor-General.
Municipalities in KwaZulu-Natal paid consultants more than R200m to perform work that should be done by the staff of the municipalities. The Office of the Auditor-General of South Africa stated that while the figure had declined by almost R20m from the previous year, it was still high.
The revelations angered some members of the Standing Committee on Public Accounts (Scopa) who expressed that this was clearly an ineffective use of consultants and demanded to know which municipalities were implicated in this conduct.
Even more concerning for the Auditor-General (AG) is that when consultants are hired, there is no skills transfer that takes place between them and the municipal employees. The Mercury learned from some Scopa members that monthly reports about the state of the municipalities paint a picture that is not improving. AGSA staff in KwaZulu-Natal met with members of Scopa in the provincial legislature to provide a detailed briefing on the audit outcomes for the 2023-2024 financial year.
The issue of the use of consultants has been a constant complaint, especially since the work of the consultants should be performed by staff working for those municipalities. In a briefing on the matter, the AGSA in the province said the amount spent on consultants had decreased from R240m to R220m, but it was still high. Nomalungelo Mkhize, the AGSA official responsible for the office in KwaZulu-Natal, highlighted the issue of consultants.
“There are still a number of municipalities that continue to use consultants for financial reporting in areas such as asset management, preparation of fixed asset registers, review of financial statements, and tax services. Many are being appointed due to a lack of skills, vacancies, or a combination of both.
“We have seen municipalities that have been recurrently appointing consultants, which raises questions about whether the consultants, as part of their work, are actually transferring skills or not. We have found that the process of skills transfer is not happening at some of these municipalities, and therefore year on year, there are consultants appointed to do the work that should be done by the municipality.”
She added that sometimes the consultants' work contains material misstatements.
“So, municipalities are calling in experts to do the work, and we are still finding mistakes in the work that the consultants are meant to be assisting the municipalities with. Yes, at times the consultants are taking on work that they may not be able to complete with quality standards, for various reasons.”
“We are also finding that where consultants are placed in a municipality, they are not being monitored. They do not monitor whether they are delivering on what they are contracted for; sometimes they are appointed too late and cannot deliver on what they had been appointed to do, but the payment still goes through,” said the AGSA official.
Chair of the Scopa committee, Tim Brauteseth, said the revelations meant there was an ineffective use of consultants: “We are told that there are municipalities where there are no skills transfers; which are those municipalities?” he questioned.
“This is really concerning. There are instances where municipalities require specialised skills, and you bring in consultants before general financial reporting. We really should be using our own staff members.
“What is worse is that we are not even getting value for money because the work these consultants are producing still has misstatements,” said Brauteseth.
Another Scopa member, Lourens De Klerk, said it's baffling that highly educated and highly paid officials are relying on consultants. “These are highly paid and supposedly highly qualified people, yet they are hiring consultants. What this says is that these people simply cannot do the job.
“By hiring consultants, they are implicitly admitting that they cannot do the work, and they should either resign or be fired. We all know the state does not have money, yet these municipalities are hiring consultants.”