The startling revelations were made by the Auditor-General Kimi Makwetu on Wednesday, during his annual report on municipalities.
The audit findings showed that SA’s 257 municipalities recorded irregular expenditure amounting to R25,2bn in the 2017/2018 financial year.
Only 18 municipalities received clean audits after they produced quality financial statements and performance reports.
They are owing pension fund R70m by their own admission
Makwetu revealed that 34% of the municipalities disclosed that their expenditure far outweighed their income, making them unable to honour payments, including those of bulk electricity and water.
In lay means terms- municipalities will in future fail or already failing to honour salaries and services, thus could lead to another bloody delivery protest in municipalities already struggling.
The AG did not mention the 18 municipalities.
Affected municipalities includes seven from the North West – five each from the Free State, Eastern Cape and Northern Cape, three from Mpumalanga, two from both KwaZulu-Natal and Limpopo.
Most of them lost millions invested into the defunct VBS Bank and are now under forensic investigation or under-administration, as a result owe pension and provident funds.
Makwetu said the municipalities currently with deficits were finding themselves in a situation where “the ability to pay creditors is slipping away”.
“It means that you’re going to find certain municipalities going to struggle to pay employees among others, you’re going to constantly find municipalities that take money that was earmarked for things like medical aid and pension fund contributions being used to pay for operating costs,” Makwetu said.
This is agitated by municipal managers or administration that lacks capacity, experience and qualifications thereof, as a result of cadre deployment.
Corruption, looting, malfeasance and having disregard for your own community is the cornerstone of such despicable and horrendous situation we find ourselves in.
92% of the municipalities could not formulate financial statements that complied with key legislation and ignoring recommendations made by the office of A-G.
In the past Makwetu and his staff came under threats and intimidation from disgruntled municipality members who felt uncomfortable being investigated and not meeting their obligations.
Will this rot ever come to an end?
Image (Shooting from the hip. A-G Kimi Makwetu says out of 287 municipalities only 18 obtained unqualified reports in SA).
