Procurement worth R1.3-billion at 52 municipalities stands unaccounted for, as the Auditor-General could not audit this due to incomplete information, TimesLive reported. This means that nearly a quarter of all municipalities did not go through the proper procedures when procuring services.
Auditor-General Kimi Makwetu released his report into the state of municipalities for the 2016/17 financial year on Wednesday. The majority of the offending municipalities are reportedly in Gauteng where R830-million's worth of procurement could not be audited. The second and third worst offenders are the North West (R155-million) and Mpumalanga (R106-million).
Makwetu reportedly revealed that at 22 municipalities, tenders worth R7.92-million were awarded to councillors. At 26 municipalities, tenders were awarded to the close family members of municipal officials, and uncompetitive and unfair procurement processes were used at many municipalities, he reportedly said.
Overall, the performance of municipalities has regressed, Makwetu said, according to Eyewitness News. Makwetu reportedly said that assistance provided to municipalities by his office on how to improve their audit results has mostly not implemented, and sometimes completely ignored.
Only 16 municipalities of the total 257 improved, and only 33 municipalities could produce quality financial statements. Most municipalities are barely going concerns, and this is the highest instance of non-compliance of municipalities since 2013, Makwetu reportedly said.
According to MoneyWeb, Makwetu said irregular expenditure at municipalities had almost doubled in the last financial year. Irregular expenditure is now at R28.4-billion across all municipalities, due to "glaring governance, leadership and oversight lapses".
Overall, the situation was regressing, he reportedly said.
"There has been no significant positive change towards credible results; instead we are witnessing a reversal in audit outcomes," he said.
Governance expert Paul Berkowitz told MoneyWeb this could result in Treasury stepping in.
"This will definitely put pressure on Treasury. And you might just see Treasury stepping in more and more to take over powers from municipalities. It's not something they'd want to do but things are looking pretty desperate."
The worst offending municipality in terms of irregular expenditure is Nelson Mandela Bay Metro in the Eastern Cape, according to Fin24. It is followed by the OR Tambo District municipality in the Eastern Cape, and the City of Tshwane Metro in Gauteng. Rustenburg in the North West is next, followed by the Ngaka Modiri Molema District municipality, also in the North West. The City of Johannesburg is the sixth worst offending municipality.