Scathing report of South Africa's delivery of services cites financial irregularities

Wed, Jul 25, 2012, 01:00

THE SCALE of South Africa’s service delivery problems was laid bare yesterday with the release of a report that revealed only 13 of South Africa’s 283 municipalities received clean audits in the last financial year.

Auditor general Terence Nombembe’s damning report for 2010-2011 outlined a litany of financial irregularities that go a long way to explaining why South Africa’s poorest citizens have been taking to the streets for years to vent their dismay at local government’s poor service delivery record.

According to the report, procurement processes to the value of €350 million could not even be audited by the auditor general’s office because municipalities did not provide the required information or documentation.

In 46 per cent of the audited municipalities, contracts for the delivery of services were awarded to employees, councillors, and other state officials, while a total of 65 per cent of municipalities used unfair or uncompetitive procurement processes.

No municipality in the Eastern Cape, Free State, Gauteng, Northern Cape and North West provinces received a clean audit. However, 45 per cent of all municipalities obtained unqualified audit reports, with the help of auditors.

The report said the three root causes behind the failures were a lack of consequences for poor performance, a lack of competence among staff and the failure of municipalities to take ownership of key financial controls.

Addressing the media yesterday, Mr Nombembe said two-thirds of people employed in key local government positions, primarily in the finance sector, were not able to do their jobs properly.

Paul Hayman of the Institute for Accountability in Southern Africa said this could be attributed to the African National Congress’s (ANC) tendency to deploy its members to local government positions.

“One of the more interesting statistics in the report is that 91 per cent of municipalities are employing outside consultants where they already have people in place to do the job.

“This is a consequence of cadre deployment by ANC,” he said, adding the party was putting people into jobs they cannot do.

Following the release of the report, finance minister Pravin Gordhan said the national treasury would take a tighter grip on procurement processes.

“Where there are transactions for a particular size or type within the national domain there must be the ability to assess whether they meet market criteria in terms of prices [and] whether proper processes have been followed,” he said.

Mr Gordhan said IT systems would be developed so the treasury could actively monitor compliance with financial management requirements.