JOHANNESBURG, GAUTENG — The latest Gauteng municipal audit outcomes have exposed a deepening financial crisis in the province, with irregular spending surging to R14.4 billion. As financial mismanagement continues to severely impact local service delivery, Gauteng Finance MEC Nkululeko Dunga has outlined aggressive intervention plans to restore accountability and curb the escalating irregular expenditure.
The consolidated audit findings paint a troubling picture of local government financial standing. While the Midvaal and West Rand municipalities achieved clean audits, and six other municipalities received unqualified audit opinions with findings, three municipalities received qualified audit opinions. Most concerning is the regression at the metropolitan level, with no metro securing a clean audit.
Dunga acknowledged the disappointing results, noting that the Auditor-General’s findings have become almost predictable year after year. “It’s almost like they don’t even have to go through the books to make a determination. It’s automatic that these are the findings, and they just change the date and the time, and it’s still the same thing,” Dunga stated, emphasizing that political will is now required to implement the Auditor-General’s recommendations.
Root Causes of Financial Bleeding
When addressing where the financial wheels are coming off, Dunga identified contract management as the primary failure point in municipalities. This systemic issue has led to a massive rise in irregular and unauthorized expenditure, pointing to the manipulation of tender systems and bidding processes. In many instances, contracts are being signed off by individuals without the delegated authority to do so. Dunga noted that while some errors may be made in good faith, deliberate irregularities by learned officials border on fraud.
Furthermore, massive revenue leakages are crippling municipal finances. Dunga highlighted severe losses in water and electricity, noting that billions of rands are lost because electricity bought by municipalities is either lost through decayed infrastructure or stolen via illegal connections without being paid for.
The Real-World Cost of Irregular Expenditure
The financial mismanagement has a direct and devastating correlation with poor service delivery. Irregular expenditure has more than doubled from R6.6 billion in 2021 to the current R14.4 billion. Despite these massive financial losses, residents continue to face deteriorating roads, severe water shortages, large housing backlogs, and poor waste collection.
Dunga pointed to the tragic dilapidation of state assets to illustrate the human cost of this financial mismanagement. In one harrowing example, a house burned down and lives were lost because fire engines lacked the water necessary to combat the blaze. These compounding failures in infrastructure and basic service delivery have sparked continuous protests and uprisings across communities.
Interventions and Accountability
To reverse the trend, the provincial government is implementing a multi-pronged intervention strategy. Dunga emphasized the need to strengthen Municipal Public Accounts Committees (MPACs), which serve as standing oversight bodies, urging that politics must be set aside to deal strictly with governance.
Drawing on a Constitutional Court ruling regarding the EFF versus the Public Protector, Dunga stressed that Auditor-General recommendations must be treated as mandatory directives rather than optional suggestions. The province plans to utilize Section 39 of the Public Finance Management Act (PFMA) to hold accounting officers directly and personally liable for financial mishaps.
To ensure these measures are effective, the province is deploying its technical staff to assist local districts and municipalities, trickling down provincial expertise to the local level. Oversight will also be intensified by shifting from yearly to monthly meetings with audit committees, allowing the province to identify and intervene in financial issues within weeks rather than waiting months or years.
Dunga admitted that these corrective measures will face significant resistance from the very officials who are in the span of control and responsible for the financial mess. However, he affirmed the province’s unwavering commitment to enforcing accountability, ensuring that when the time comes to account to the people of Gauteng, the government can demonstrate that every possible corrective measure was taken.
