Auditor-general (AG) Tsakani Maluleke revealed Wednesday that financial reporting consultants cost local government R5,31 billion during the previous administration.
As many as 70% of municipalities use consultants every year, the AG said.
“Financial reporting consultants have become a permanent feature in municipalities’ processes, and the annual cost of consultants doubled over the term of the previous administration, with the financial reporting cost of consultants totalling R1,26 billion in 2020-21,” said Maluleke.
The AG made the revelation during the launch of the 2020-21 consolidated general report on the local government audit outcomes.
“The lack of improvement in municipal outcomes is an indictment on the entire local government accountability ecosystem, which failed to act and arrest the decline that continued to be characterised by service delivery challenges in municipalities,” said Maluleke.
Overall, only 61 municipalities had a better audit outcome in 2020-21 than in 2016-17, with 56 now having a worse audit outcome.
The AG said it was, however, encouraging to see the slight increase in the number of clean audits.
“Twenty-seven municipalities were able to maintain their clean audit status throughout the administration, while 14 achieved a clean audit for the first time and six lost their clean audit status,” said Maluleke.
“However, clean audit outcomes continue to represent less than a fifth of the local government budget.”
Maluleke said a clean audit outcome was not always an indicator of good service delivery and does not always directly correlate to the lived experience of all the communities in a municipal area.
“However, we have seen that municipalities that have the controls and systems in place to plan, measure, monitor and account for their finances and performance, and to stay within the rules, often also have a solid foundation for service delivery that will benefit their communities.”
Maluleke said the report “presents a not-to-be-missed opportunity for the new administration to address the already reported audit findings,”.
She called on all role-players involved in local 15 June 2022 MFMA 2020-21 audit outcomes on “local government | 2 government to heed our call to action to transform local government and improve people’s lives”.
The latest report reflects on the audit outcomes over the five-year term of the previous local government administration.
Maluleke said the trends in the report demonstrate that the fourth administration (2016-17) “left municipalities in a worse financial position” than when they took office.
“The lack of improvement in municipal outcomes is an indictment on the entire local government accountability ecosystem, which failed to act and arrest the decline that continued to be characterised by service delivery challenges in municipalities,” said Maluleke.
She said the report “presents a not-to-be-missed opportunity for the new administration to address the already reported audit findings”.
The consolidated general report on the audit outcomes of local government is available on: www.agsa.co.za.
