Material irregularities and suspected fraud within South Africa’s municipalities have led to financial losses exceeding R7 billion in the past fiscal year, according to Auditor General (AG) Tsakani Maluleke. However, the work of the AG’s office has helped prevent almost R1 billion in further losses, some of which are still in the process of being recovered.
Presenting her findings on Tuesday, Maluleke painted a grim picture of the financial state of the country’s 257 municipalities, emphasizing the urgent need for a cultural shift toward ethical leadership. “We also highlight that we’ve got to push back on the culture of poor accountability and poor consequence management,” she stressed.
Maluleke noted that while it is not the role of her office to act as accounting officers, the AG’s efforts aim to enforce better compliance with the law. The 2022/23 audits identified 360 material irregularities, leading to the prevention of over R200 million in potential losses and the recovery of an additional R260 million.
In addition, municipalities are in the process of recovering a further R444 million in financial losses. Maluleke attributed some of these improvements to the legal amendments made five years ago that empowered her office to take action against accounting officers for irregular expenditure.
Since then, she believes this authority has prompted better responses to financial mismanagement. However, Maluleke cautioned that the issue requires more than just the AG’s powers to correct. “We cannot rely solely on these material irregularity powers to get local government operating on its mandate and with efficiency. It’s imperative that we worry about the people running municipalities to do so properly.”
While the AG’s office has considered issuing certificates of debt against accounting officers, Maluleke said they have not yet taken that step.
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