IMATU Calls on the Auditor-General to Act Swiftly in Taking Remedial Action following her Report on Local Government Audit Outcomes

The Independent Municipal and Allied Trade Union (IMATU) has noted with serious concern, the latest Auditor-General’s Consolidated General Report on Local Government Audit outcomes for the 2022-23 financial year.

The report yet again paints a bleak picture of financial mismanagement in the local government sector with only 34 out of 257 municipalities receiving clean audits.

The Auditor-General’s findings have highlighted the scale and extent of financial mismanagement in the sector which directly affect municipalities’ ability to deliver services to communities. This has been a worrying trend for a number of years.

The Auditor-General’s findings also demonstrate the urgent need for comprehensive measures to address the challenges faced by the sector. It is particularly concerning that no meaningful improvement has occurred over the last two years. Moreover, the audit outcomes of metros have worsened, despite metros typically having greater capacity and bigger budgets to more easily attract suitably skilled and competent professionals to improve their outcomes.

In her report, the Auditor-General has, yet again, attributed the poor audit outcomes to a lack of skills and capacity, governance failures and a culture of no accountability and consequences. Her findings highlight the need for municipalities to rigorously enforce the competency requirements regulations contained in the Municipal Systems Act and appoint competent senior managers to key positions.

IMATU has further noted the continued and excessive reliance on consultants to prepare financial statements, despite having appointed senior managers to do the job, only to find that in many cases, the consultants too fail to do the job properly. IMATU is of the view that this problem is symptomatic of a failure to appoint skilled financial professionals to key finance positions as well as high vacancy rates.

IMATU has repeatedly called on municipalities to appoint competent senior managers, especially in the areas of financial management and supply chain management. IMATU was at pains to highlight the need to appoint skilled and qualified professionals at a Professionalisation Indaba, arranged by SALGA in March 2023.

At this Indaba, IMATU committed itself to expanding our monitoring and oversight role in ensuring that municipalities comply with legislation, protect whistleblowers and appoint competent candidates to key positions. The Municipal Staff Regulations have given IMATU the right to participate as observers at interviews and shortlisting of candidates, and we intend to make use of this right to the fullest extent.

IMATU is also planning to conduct a mid-term conference in Cape Town on 16-17 October 2024. The theme of the conference is “Let’s get Local Government Working” and the purpose is to develop a union position on how the sector can be professionalised.

IMATU further supports the proposed amendments contained in the draft Local Government General Laws Amendment Bill, which provides that staff members must refrain from committing financial misconduct and ensure that unauthorised, irregular or fruitless and wasteful expenditure and other losses are prevented.

IMATU also fully supports the Auditor General’s calls for increased intergovernmental support, the professionalisation of local government, and the promotion of a culture of ethics and accountability.

IMATU, as a responsible trade union, has a vested interest in the sustainability of this sector and we cannot turn a blind eye to these repeated instances of financial mismanagement that reflect badly on the entire sector. Municipal employees provide valuable and desperately needed services to the public and reports of this nature impact negatively on the morale of our members. IMATU has therefore taken a firm stand against corruption, maladministration and financial mismanagement in this sector.

IMATU calls on all local government stakeholders to become actively involved in taking measures to prevent these repeated disclaimers.

Quotes attributable to the General Secretary, Mr. Johan Koen:

“As IMATU we acknowledge the key role of the Auditor-General and we declare our unwavering support for her office. We call on the Auditor-General to use her powers under the Public Audit Act to take the necessary remedial action and ensure that all financial losses are recouped. IMATU will also request a meeting with the Auditor General to identify areas of collaboration and opportunities to work together to improve the audit outcomes in the Local Government sector”.