MEDIA STATEMENT BY INSTITUTE FOR LOCAL GOVERNMENT ON AUDIT OUTCOMES RELEASED BY AUDITOR-GENERAL OF SOUTH AFRICA:
As the Institute for Local Government Management of South Africa (iLGM), we welcome the Audit Outcomes released by Auditor-General of South Africa (AGSA) with dismay as they draw attention to poor performance by municipalities. Notwithstanding this, the sharp increase on Unauthorised, Irregular, Fruitless and Wastefull Expenditure (UIFW) is a cause for grave concern. In this regard, as Local Government Practitioners we need to decisively grab this bull by its horn, with the understanding that old ways of doing things wont open new doors for us – meaning we have to be open to new thoughts about UIFW.
We congratulate municipalities that have managed to maintain good audit outcomes, (clean or unqualified opinions) and those that have shown some improvements as compared to their previous year’s performance. To those that have regressed and determined to do better, our words of encouragement are that “success is simple, continue doing what is right, the right way, at the right time and knowing that it does not consist in never making mistakes but in never making the same one the second time”
As ILGM we discourage over-reliance on consultants as this might be construed as lack of capacity amongst local government practitioners whilst same consultants and municipal officials come from the same academic background. We wish to encourage Senior Managers to ensure that skills transfer programmes are developed and adhered to whenever consultants are engaged.
We strongly believe that dealing with root causes of poor audit outcomes objectively will improve the situation. To this end, we propose the following intervention measures:
- Working together with Political Leadership, we need to ensure stability at senior managerment level through prioritization and filling of critical senior management positions. Our observation is that municipalities where Municipal Managers (MMs), Chief Financial Officers (CFOs) in the main and other senior managers are employed on average for more than 5 years, are likely to achieve good audit outcomes. On the other hand, municipalities which continually change MMs and CFOs as well as other senior managers are likely to have poor audit outcomes.
- There is a need to eradicate the practice of employing officials who do not have prerequisite skills and competencies in senior managerial and critical positions. In addition to Senior Managers. appointing competent officials to the following sections / units / branches Budget and Reporting; Supply Chain Management, Asset Management; performance amangement and Internal Audit., could contribute towards creating an enabling administrative environment for improved audit outcomes: this does not anyway suggest that Municipalities can employ unsutable officials in other sections / units / branches but it simply says maybe starting there will be way in the right direction.
- Governing parties in municipalities must ensure that political interference is halted, as there could be no Mayor or Municipal Manager or Council who would voluntarily seek to employ officials that are not suitably qualified. This does not in anyway suggest that all problems of the local governemebt are attributed to political interference but it has its fare share to the known local Governement problems. We are mentioning Mayors and Municipal Managers because their heads are the first ones to roll where there is porr performance. Municipalities are built or destroyed at the point of selection and recruitment. We always encourage our members to receuit only suitably qualified officials in order to relealtise the objects of Local Governement as enshrined in section 152 of the constitution of Republic of South Africa
- We reiterate on our call for the employment of all managers directly reporting to the Municipal Managers on a permanent basis as we believe that, this will immensely stabilize municipalities as senior management vacancies will be drastically reduced and business continuity will be guaranteed, regardless of periodic Council transitions that emanate from municipal elections.
- As iLGM, we would like to partner with AGSA, SALGA and COGTA in conducting research into factors that lead to poor audit outcomes, as we are confident that we will be vindicated in the points we have raised above, together with our impassioned call for the professionalization of local government. In essence, we assert that management will prevail in most, if not all, municipalities in our country. What we yearn for is overwhelming political will—both in Municipal Councils and local political structures of governing parties—to enable municipalities to operate in accordance with the letter and spirit of the Constitution of the Republic and pertinent pieces of legislation, thereby enabling managers to run municipal administrations without fear, favour or prejudice.
We would love to have a platform with AG on these matters in order to contextualise our practical understanding of the problems facing Local Government which may assist AG on value add programmes when they audit the Municipalities .
Institute for Local Government Management of South Africa (iLGM)