Parliament's watchdog demands answers from municipalities over financial audit crisis

The Standing Committee on Public Accounts (Scopa) is taking decisive action against municipalities that have failed to submit their financial statements for audit purposes, with plans to summon council members and provincial MECs of finance and local government.

This comes after a briefing from the Office of the Auditor-General (A-G) concerning 10 municipalities with outstanding annual financial statements during the 2023/24 audit cycle.

Chairperson Songezo Zibi expressed urgency in addressing the compliance failures by the affected municipalities.

“We need in a short order and before the end of next term to have had a meaningful interaction in this committee with provincial executive members as well as the councils concerned,” Zibi said.

The committee aims to formulate a strategy for addressing the non-compliance issues highlighted by the A-G.

Municipal accounting officers are obligated to submit financial statements to the A-G within two months following the end of the financial year.

When municipalities fail to comply, the A-G must report these cases to Parliament, hampering accountability and oversight.

Bongi Ngoma, head of audit at the A-G’s office, highlighted that the non-submission of annual statements prevented proper accountability for accounting officers.

Ngoma noted that Gauteng, Eastern Cape, and KwaZulu-Natal have maintained an impressive track record with a 100% compliance rate.

The North West and Free State remained the most challenged provinces in submitting their financial statements, while Mpumalanga regressed.

As of January, five municipalities Mafube, Kopanong, Mohokare, and Masilonyane in the Free State, and Thileda in Mpumalanga, had outstanding audits.

The audits for !Kheis in the Northern Cape, Kagiso-Molapo in the North West, Msunduzi in KwaZulu-Natal, and Matjhabeng and Maluti-A-Phofong in the Free State, have been completed late.

Despite Scopa’s workload with other councils on the agenda, Zibi assured members that it would prioritise discussions with the concerned municipalities to address the issues raised by the A-G and report back to Parliament.

He noted that there appeared to be failure at several levels starting with municipal council and administration to a varying degree at the provincial level by MECs, up to the National Treasury.

“We must generally try and avoid doing the work of Finance MECs and MECs of Local Government. However, we have the opportunity to hold them to account on specific issues of financial management, mismanagement, loss of money to the state and so on,” Zibi said.

He also said the exercise would prove to the citizens that Parliament was attending to the matters.

“That will restore confidence in our democratic system and the work of Parliament. We can assure South Africans that we really intend to do this and we will look at our programme and see where we can make adjustments so that we take this up,” Zibi added.

Ngoma told Scopa of their observations regarding the affected municipalities that did not submit their annual financial statements and received either a disclaimer or a qualified audit opinion.

“We hardly have a case that they are unqualified with findings or clean audits,” she said. The lack of basic controls and adherence to laws and regulations by the councils has resulted in persistent non-delivery of services and inadequate asset management, Ngoma added.

The A-G found, among other things, that the municipalities' asset management was not accounted for properly, infrastructure projects were not concluded on time, maintenance was not done in line with norms, and the conditional grants were not used in line with their intended purposes.

“The ultimate impact of all this is non-delivery of services on the ground,” Ngoma said.

mayibongwe.maqhina@inl.co.za