The Portfolio Committee on Co-operative Governance and Traditional Affairs (CoGTA), chaired by Hon. Mzi Khumalo, convened on Friday (13th September 2024) with the Auditor-General of South Africa (AGSA) following the Committee’s recent concerns over the poor performance of Gauteng municipalities. The meeting focused on the AGSA’s audit outcomes for the Department of CoGTA (2023/24 FY) and Gauteng municipalities (2022/23 FY).
The AGSA’s presentation highlighted the following key performance issues in municipalities, that require immediate action:
Widespread Non-Compliance with Legislation, where several municipalities were found to be in breach of procurement laws, with uncompetitive and unfair procurement processes leading to irregular expenditure. The AGSA identified R7.533 billion in irregular expenditure, largely due to non-compliance with procurement regulations.
The audit outcomes reveal significant financial mismanagement, with an increase in unauthorized, irregular, and fruitless expenditure across municipalities, amounting to R9.879 billion in irregular expenditure, R5.154 billion in unauthorized expenditure, and R1.381 billion in fruitless and wasteful expenditure. This mismanagement is directly linked to inadequate financial controls and oversight.
Poor service delivery and project Implementation is another serious concern, where delays in infrastructure projects due to poor planning and monitoring were a recurring issue negatively impacting service delivery. The AGSA noted that these delays are exacerbated by weak internal controls and a lack of accountability, which continue to undermine the effectiveness of municipal operations.
Additionally, many municipalities are struggling with financial sustainability, with the AGSA reporting that 76% of municipal debt is not recoverable. Additionally, several municipalities have been passing unfunded budgets, further jeopardizing their financial stability and ability to provide essential services.
In response to these findings, the Portfolio Committee expressed deep concern over the pervasive non-compliance and the ongoing financial mismanagement in municipalities. The Committee emphasized the need for municipalities to adhere strictly to legislative requirements and improve their financial and operational management to ensure better service delivery to residents.
To address some of these issues, the Committee committed to convening public hearings in struggling municipalities. These hearings will serve as a platform for engaging with local leaders, stakeholders, and the public to identify solutions and hold municipal officials accountable for their performance. The Committee also reaffirmed its commitment to rigorous oversight and will closely monitor the implementation of corrective actions as recommended by the AGSA; and ensure that consequence management is implemented where required.
Furthermore, the Committee pleads for enhanced coordination between CoGTA, Provincial Treasury, municipalities, and other relevant bodies to provide targeted support to municipalities in distress. The Committee will continue to work tirelessly to ensure that all municipalities in Gauteng operate with the highest standards of governance, transparency, and accountability.
ISSUED BY GPL’S MEDIA SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS, HONOURABLE MZI KHUMALO.
