SA Auditor-General Kimi Makwetu has remarked that Free State remains one of the worst-performing provinces in terms of the municipalities, with an irregular expenditure of R1.4 billion in terms of local government audit outcomes for 2018-2019. After the remarks, Free State Weekly’s Thapelo Molebatsi spoke to MEC for Finance Gadija Brown to find out how the provincial government collectively intends to turn around the situation and ensure financial compliance in local government, which is foreign according to the AG’s findings.
What is your take as MEC on the recent Auditor General (AG)’s report on the state of municipalities in the Free State?
The audit outcomes provide a somber state of municipal finances. Despite Treasury’s support to financially distressed municipalities and the voluntary recovery plans that have been developed, it is unfortunate that we have seen very little improvement by our Free State municipalities.
Would you agree that poor leadership and a lack of accountability are the culprits behind yet another year of dismal financial outcomes in local municipalities in the FS?
One of the things highlighted by the AG’s report is the low level of assurance provided by the various leadership structures at the municipalities. The province has however supported municipal officials on attaining their minimum competency requirements. Also, the EXCO has decided that municipal officials must meet the requirements for their respective appointments. Performance management and consequent management have been lacking and it has to be one of the focus areas for both MEC Cogta and Treasury.
For the third consecutive year, none of the municipalities in the province achieved a clean audit.
This is true.
What is your view on this matter? Moreover so, does this in any way suggest that we have wrong people deployed to run our municipalities?
In line with legislative prescripts which call for cooperative governance, a collective push with MEC for Cogta is being provided on the oversight on all top management appointments at FS municipalities.
In his report, the AG clearly states that there are no consequences for officials who don’t look after public funds. Do you share the same view?
Together with MEC for Cogta, disciplinary boards have been in place at municipalities. We have impressed on these governance structures to take the requisite actions. The process has to remain in line with labour prescripts and disciplinary processes.
Why is it that Treasury has failed to hold anyone accountable taking into account this is the third time we find ourselves in the red as a province?
In line with the Treasury’s MFMA mandate of monitoring and supporting municipalities, the necessary reports are prepared and provided to the relevant governance structures such as the Provincial Public Accounts Committee, which in turn is made up of all parties. A strong stance to improve this position has been taken. Recommendations are made to the council and management of municipalities are provided for further action.
Maluti-a-Phofung and Masilonyana municipalities had, for the second consecutive year, failed to submit financial statements. Is there any explanation why these two municipalities have once again failed to make their submissions?
These municipalities had a historic backlog in terms of submitting financial statements. Necessitated by this and other legislative considerations, an intervention was implemented at these municipalities. As a result, there is a plan to assist the two municipalities to catch up with the submission of their annual financial statements.
The AG also mentioned that there are not enough qualified and experienced senior managers in local government. Why is this case? Are there plans in place to ensure that the right people are engaged?
Provincial Treasury has been instrumental in the implementation of the minimum competency regulations. In line with these regulations, we have seen officials at all municipalities achieving the necessary prescribed qualifications.
Also, does this speak to the mismatch in terms of skills in local government, hence we are the second worst performing province in the recent Municipal Audit Outcomes as was the case in the 2017-2018?
Both National and Provincial Treasury have invested substantially in programs to augment the skills shortage at municipalities through programs such as the Municipal Support Programme, Municipal Financial Recovery Services and the Municipal Finance Improvement Programme.
Municipalities’ ability to deliver services efficiently is dwindling, not only in Free State but across the country, due to lack of adherence to fiscal management laws. What could be the cause of this?
Service delivery is certainly negatively impacted by several factors including low collection rate, rising unemployment, and increasing number of indigents.
As a province, how do you go about rectifying this and ensuring adherence?
Regulatory monitoring is being done through PROPAC and also on-site inspection to improve visibility and municipal fiscus.
With the bleak picture painted by the AG, how will Treasury, working with the provincial government, go about instilling a sense of trust among its citizens following failure to render necessary services due to misuse of monies?
We certainly owe it to chapter 9 institutions such as the AGSA to highlight gaps in terms of reliability and quality of reporting by the different government institutions and entities. Ours is to take up these issues and ensure that comprehensive and responsive audit action plans are developed and implemented by the municipalities.