More than two-thirds of all local authorities in South Africa face imminent collapse due to fraud, financial irregularities and general economic mismanagement, a new report by that country’s Auditor General (AG) has warned.
A protest against “service non-delivery” in Mabopane, South Africa’s North West province.
According to the Volksblad newspaper, the AG report “paints a very dark picture” and raises “questions about the future existence of nearly two-thirds of the country’s municipalities.”
According to the AG report, as at the end of June 2016, municipalities in South Africa had a combined R41.7 billion “irregular allocations” on their books.
“Irregular allocations rose by more than 50 percent from 2015 to 2016, by more than R16 billion, the highest levels seen since monitoring became,” the report continued.
“The Free State, Northwest, and North Cape provinces are the poorest performers and many of their audit reports were not even handed in for inspection.”
The AG report highlighted a number of serious problems, including the “excessive use of consultants and the allocation of contracts to employees, councilors, their families and civil servants.
With regard to the latter problem, the report continued, as soon as auditors spotted a problem and arrived to audit records, “all documents vanished” and could not be found, in contravention of all laws concerning record-keeping.
“It is general knowledge that the chief cause of the problems facing local authorities is poor financial management,” the report said, “which results from the appointment of unqualified officials.”
“In addition, municipalities are crippled by political conflicts within the ANC with posts being awarded on the basis of factional loyalties,” the report said.
In addition, local government is collapsing because the Africans see appointment to the councils as “a route to self-enrichment,” while “service delivery is shunted to the bottom of the ladder,” the report said.
The AG report said that the collapse in local authorities was “symptomatic of the national problem: namely a lack of responsibility.
“Financial mismanagement will continue as long as there are no consequences for the perpetrators,” the report says.
The report audited 263 municipalities and 51 municipal entities, of which only 49 municipalities achieved “clean” status.
* It is not only local authorities which are collapsing under African rule. According to another report, the Passenger Rail Agency of South Africa (Prasa) “seems to be paralyzed by systemic corruption.
“A recent investigation by National Treasury found that only 13 out of 216 contracts awarded between 2012 and 2015, all with a value exceeding R10-million, were above board.
“Sfiso Buthelezi, the former Prasa board chair and recently appointed deputy minister of finance, must be criminally charged for turning a blind eye to the state entity being fleeced, his own department had found.”