Auditor General Tsakani Maluleke. Picture: Oupa Mokoena / Independent Newspapers
Auditor-General (AG), Tsakani Maluleke, has emphasised the need for municipalities to adopt effective financial management strategies during her address at the National Press Club breakfast meeting yesterday.
Marking five years since her office received enhanced powers, Maluleke stressed the importance of leveraging limited resources efficiently.
She advised communities to ensure assets deliver services and infrastructure projects are cost-effective.
Maluleke also highlighted the need for robust controls to prevent recurrent issues and protect resources from being lost.
By doing so, municipalities can prevent further losses and optimise financial management.
In 2019, Maluleke was given a mandate that goes beyond auditing by Parliament and was required to expand the AG’s office participation in government accountability processes.
The overall aim of the AG’s expanded mandate is to instil a culture of accountability, improve the protection of resources, enhance public sector performance, encourage an ethical culture and strengthen public sector institutions to better serve the people of SA.
“I want to keep highlighting that ours is never to take over the role and responsibilities of the accounting officer, the responsibility of the executive authority or… even the responsibility of parliament that must hold people accountable or the Special Investigative Unit…Ours is to work in a complimentary way to support effective consequence management and accountability… Our role is to audit reports and follow up on the recommendations,” Maluleke said.
During her address, Maluleke also revealed that municipalities’ investments in the defunct VBS Mutual Bank resulted in financial losses of R1.6 billion.
Despite a warning from the National Treasury, several Limpopo municipalities invested public funds in VBS, leading to significant financial losses in what was dubbed the “Great bank heist” by Advocate Terry Motau in a forensic report instituted by the government in 2018.
This in connection with burial societies; stokvels; individuals, particularly the elderly in Limpopo and municipalities lost about R2.3 billion of their investments in the bank after the brazen looting of the funds by its management and politicians.
Maluleke said her office issued 13 material irregularity notices related to these investments. However, the recovery of lost funds has been minimal, with only R107 million recovered, representing a mere 7% of the total losses.
According to Maluleke, this significant financial loss was concerning, as these funds were intended for infrastructure development and service delivery improvements, ultimately affecting citizens’ quality of life.
Previously, during her presentation of the 2022-23 consolidated general report on local government audit outcomes to parliament, she revealed that only 34 of SA’s 257 municipalities obtained clean audits.
She found that a staggering 86% of municipalities received material compliance findings, indicating a regression in adherence to legislation.
Delays, cost overruns, and poor-quality work plague infrastructure projects, while inadequate maintenance leads to deterioration.
Poor financial management persists, causing revenue losses and service delivery disruptions. Unpaid creditors, including Eskom and water boards, threaten access to basic services.
However, 18 municipalities improved and moved out of the negative category while 14 municipalities received disclaimed opinions, with support from provincial governments driving progress.
Meanwhile, last week, Maluleke while tabling the Department of Health audit report in the Gauteng Legislature, slammed it for poor financial management, false reporting of achievements, and a lack of consequences for transgressing officials.
The Star
mashudu.sadike@inl.co.za