Auditor-General, Tsakani Maluleke has warned that KZN municipalities with unqualified audits with findings needed to take action to deal with the issues that were raised by her office.
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Leaders of some of the major municipalities in KwaZulu-Natal have come under fire for failing to improve their audit outcomes.
The Auditor General of South Africa, Tsakani Maluleke, has warned that some of these outcomes reflect a failure by leaders to build capable institutions.
The Auditor General detailed this while tabling her report on the municipal outcomes for the 2023-2024 audit at the provincial legislature.
Maluleke said many municipalities had received unqualified or unqualified with findings audit opinions, which is a short step from a regressive qualified audit opinion. She noted that many municipalities have remained in this space for a long time and have become complacent.Among those in this category are the eThekwini Municipality, the Msunduzi Local Municipality, and the Ugu District Municipality, as well as KwaDukuza, Ray Nkonyeni, and Greater Kokstad, among others.
Finance MEC Francois Rodgers said the Auditor General’s report raised serious concerns, particularly regarding municipalities’ continued failure to collect what is owed by ratepayers.
The Auditor General raised concerns about the municipalities that fell under the “yellow” category; these are municipalities whose audit outcomes show that they have achieved an unqualified opinion with findings. She noted that there are 37 municipalities in this category. These 37 municipalities were among 43 with unchanged audit outcomes.
“These audits in the yellow zone are those where you will find poor service delivery, poor project management, and poor infrastructure maintenance. You will find procurement processes that go in the wrong direction, driving leakage and inefficiency of spend. The attention of the house (legislature) ought to be on all those that do not have clean audits, and I would suggest we pay greater attention to those that are in the yellow zone. Someone in the yellow zone is not fine,” said Maluleke.
“Most municipalities in the province are in the yellow zone and have stayed there for a long time. This is why I make a point about the yellow zone, which is a dangerous zone that applies to many municipalities in the province. I say it’s a danger zone because a municipality with an unqualified opinion with findings can easily move down to qualified, as we have seen with Umdoni.
"I also say it is dangerous because when you are in an unqualified space, the tendency for non-compliance, leakages, performance issues, and poor accountability continues to grow. When there is too much comfort in staying in that space, it tells us that the leaders of those municipalities are not attending to the basic things that make for a well-functioning, effective, and trusted institution,” said the Auditor General.
Rienus Niemand, of the ACDP in Msunduzi Municipality, expressed particular concern that irregular, wasteful, and fruitless expenditure in Msunduzi amounts to R900 million – a record for South Africa.
“This situation is an absolute disgrace. UIFW (unauthorised, irregular, fruitless and wasteful) expenditure are offences that must be investigated, and consequence management must be vigorously applied. The deteriorating financial situation and the spiralling increase in theft of electricity and water is shocking.”
Msunduzi mayor Mzimkhulu Thebolla said the municipality has developed a comprehensive action plan to address the audit findings raised in the 2023-2024 audit report.
“This action plan will be submitted to council for approval. As part of our commitment to accountability, the management team has already prepared the necessary correcting journals and processed them on the system.”
The DA in eThekwini said the Auditor General’s audit was shocking and underscores the severe mismanagement and lack of accountability at the highest levels of the city’s administration.