An assessment by the Auditor-General has revealed that lack of accountability and leadership failures have resulted in overall poor performance of municipalities in the Free State.
Lack of planning is cited as one of the main causes of wasteful expenditure.
The Xhariep District Municipality, in the southern Free State, is the worst performer in the province. Of the 23 municipalities in the Free State, only 18 were assessed. The remaining five had not submitted their financial statements on time.
The Auditor-General’s Free State Business Executive, Odwa Duda, says seven municipalities regressed, while no municipality showed any improvement. All municipalities require interventions.
“All our districts in the Free State they require serious intervention, all of them in the 16/17 audit outcome they reflected regression compared to the previous year. But the one for Xariep is the one that is the worst performing if I compare with other districts. But if you are looking in overall the districts in the province, they really have some challenges that require immediate intervention.”
The municipalities continue to struggle with revenue collection. As a result, they face significant cash-flow constraints and service providers such as Eskom and water boards are not paid.
Late payments translate into wasteful expenditure, as municipalities have to pay interest.
Duda says in the 2016/2017 financial year, wasteful expenditure amounted to R324 million.
“There is an increase in reported fruitless and wasteful expenditure and is because of challenges for municipalities to pay suppliers within 30 days and we also indicated in our indication that all municipalities we reported non-compliance with laws and regulations. In one of the significant non-compliance that we report is to pay within 30 days and we reported in almost all our reports that municipalities are not paying suppliers.”
Lack of planning and non-compliance with regulations when appointing contractors is also a major concern.
“We tend to not to firstly appoint the relevant/right contractors with the result that those contractors start to request for more and more variation orders. If you compare what was budgeted for the project and what was paid at the end, you actually take the money that was going to be used for other things to pay for those variation orders and the other impact of lack of planning is the projects that take longer than anticipated time to complete.”
Free State Treasury Head, George Mahlatsi, says they are working around the clock to address the problems.
“There are cases of irregular expenditure that were not necessarily investigated on time by the municipalities and we would be coming into that space work with them to investigate those cases and where necessary steps to be taken against officials who may have been negligent we will ensure that takes place so there will be consequences management as it is.” Makgala Masiteng