Municipalities with poor audit outcomes need support, says Nkosazana Dlamini Zuma

27 Sep 2022

Municipalities that have good audit outcomes should help those that are struggling, said Cooperative Governance Minister Nkosazana Dlamini Zuma on Tuesday at the start of a two-day summit on local government.

Nine municipalities with outstanding audits must be given special attention, said Nkosazana Dlamini Zuma, Minister of Cooperative Governance and Traditional Affairs, on Tuesday during her opening address at the 2022 Local Government Summit in Boksburg, Gauteng.

The summit brings together officials from all spheres of government, traditional leaders, members of civil society, academia and other stakeholders from the local government sector under the theme, “District Development Model in Action — Towards an Ideal Municipality”. It will take place over two days in Boksburg and on virtual platforms. The summit will produce a collective programme of action that will enable an ideal municipality.

Commenting on the latest municipal audit outcomes, Dlamini Zuma said: “Special attention must be given to the nine municipalities who had outstanding audits… we all have a responsibility to support them.” She urged the South African Local Government Association and municipalities “that are doing better” to play a leadership role in this.

According to the Auditor-General’s 2020/2021 report, the nine municipalities that had outstanding audits were from the Northern Cape (two) and Free State (seven).

Daily Maverick reported that only 41 municipalities nationwide had received clean audits, with most being in the Western Cape.

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Dlamini Zuma said, “For instance, 141 municipalities — which constitute 54% of all municipalities — received unqualified audits in the past financial year. Certainly, the 16% who received a clean audit can facilitate and be supportive to the 42% who either received qualified, adverse or disclaimed audits.”

Auditor-General Tsakani Maluleke said it was worrying that “we’re not getting financial management practices right”.

She said 141 municipalities (with clean or unqualified audit outcomes) had published credible financial information. “That’s worth recognising… that’s something we can build on,” she said. This equates to 54% of the 257 municipalities nationwide that published credible financial statements.

Maluleke said if her office had stopped auditing after the submission of the first version of the financial statements, “we would have landed up with not 141, but with 62… so not 54%, but 25%. What that tells you is that 75% of municipalities are unable to present credible financial statements from the word go”.

Touching on Dlamini Zuma’s remarks about municipalities having outstanding audit outcomes, Maluleke said this was an indication of “poor governance, poor discipline and poor financial management practices”.

‘Today we have no lights’

Turning to Eskom and its rolling blackouts, Dlamini Zuma said projects such as those in the aquaculture sector required a reliable, consistent electricity supply.

“We must position our municipalities as energy generators and distributors… this requires that we implement an appropriate energy mix, which continues the sustainable use of coal and fossils, while complementing them with the utilisation of renewable energy sources such as solar, wind and biomass.”

Finance Minister Enoch Godongwana said that since 2019, Eskom bailouts stood at R230-billion, and yet “today we have no lights”.

The summit will produce a collective programme of action that will enable ideal municipalities. President Cyril Ramaphosa will deliver a keynote address on Wednesday. DM

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‘Today we have no lights’