reports
2 October 2006
Gauteng Local Government MEC, Qedani Dorothy Mahlangu, today urged municipal
officials responsible for municipal finances to strive for the attainment of
unqualified audit reports.
Speaking on behalf of President Thabo Mbeki at the opening of a three-day
Institute of Municipal Finance Officers (IMFO) conference, Mahlangu said the
(AG) Auditor-General's concerns have to be taken seriously if municipalities in
the country were to achieve clean audit reports. The President was to deliver
the opening address but had to withdraw, due to the visit of the Prime Minister
of India, Dr Manmohan Singh.
Mahlangu, who was part of the team that crafted the Municipal Finance
Management Act (MFMA) and the Public Finance Management Act (PFMA), told
delegates that the processes were intricate. "I am very grateful that I was
part of the process although I did not grasp that the experience gained helped
me to understand the finances of municipalities.
"It is time that from whenever the IMFO meet, you set a clear programme of
action of what needs to be done to achieve (clean audit reports) in the next
coming twelve months before the next annual general meeting. One of the
challenges municipalities are facing countrywide, is to achieve sound financial
systems.
"The MFMA seeks to provide a regulatory framework to achieve sound
management systems and prudent financial systems. Municipalities should reduce
dependency on grants, increase the revenue basis and look for new sources of
funding," she said.
According to the AG's report, only 150 of the 284 municipalities countrywide
submitted their annual financial reports by 31 August 2005, as prescribed by
the MFMA.
"Of those reports, 33 of them were withdrawn due to material errors. By 30
June 2006, 94% of municipalities submitted, with only 6% or 17 municipalities
still outstanding.
Regarding municipal debt, Mahlangu said municipal debt is increasing
annually and there was a need to ensure that municipalities put in place
stringent credit control measures and indigent policies for the poorest of the
poor.
"Municipalities must ensure that those who are supposed to pay for municipal
services do pay and those who are supposed to get write-offs, do get write-offs
because they deserve to and not because they are the friends to the MEC or
municipal manager or because they know people who have the authority for debt
write-offs," she warned, adding that there were instances were credible
businesspeople had their debt written-off.
Mahlangu said, "A loss of R10 in the kitty (due to illegal write-offs) is a
loss of service delivery to people who deserve services. All of us should take
pride in working in this sphere of local government because our aim is to
change people's lives for the better."
She said credit control measures and indigent policies should be linked
because the core of it leads to financially viable municipalities.
"Municipalities should be self-sufficient and be able to create a single tax
base and ensure there is cross-subsidisation. It is equally important to
deliver uninterrupted services," Mahlangu said.
The MEC also took a swipe at municipal officials responsible for finances,
but who were less interested in turning the finances of municipalities
around.
"Municipal officials managing the finances of municipalities seem to be
content with the status quo of municipal finances. If the AG continues to raise
the same issues every year and nobody seems to care, why are you doing the
same?
"I believe that if you care about the finances of municipalities, the AG
would not be raising the same issues every year. The problem in most
municipalities is the 'care-free attitude' and that certain officials disregard
policies and systems, even the leadership."
"The problem is that you fire those who do well and keep those who do as
they please. The quality of auditing done by the AG is very good and needs to
be taken seriously. There are also those (officials) who say the AG has a
vendetta against them. There is nothing like that. Municipalities should take
responsibility and ensure that they reduce municipal debt, implement policies
to recover debt, implement indigent policies and ensure that the current debt
does not grow," said Mahlangu.
In his welcome address, Ekurhuleni Executive mayor, Duma Nkosi told
delegates that municipalities in Gauteng have agreed to work with each other
and with the province to achieve the goals of a globally competitive
region.
Enquiries:
Themba Sepotokele
Tel: (011) 355 5111
Cell: 082 490 9869
Issued by: Department of Local Government, Gauteng Provincial
Government
2 October 2006
