Minister Des Van Rooyen says that the issue of revenue generation and collection in the municipal financial system is in need of urgent intervention as the weakest links in the municipal financial system.
The 2014/2015 municipal audit results were released by the auditor general in Pretoria yesterday, showing that 54 out of 272 municipalities attained clean audits after inspections.
Nevertheless, the audit discovered that at least in nine out of ten councils, the financial health was of concern or in need of urgent intervention.
The minister suggests that as long as there is a lack of a solid economic base in many municipalities, it renders some of them economically sustainable.
“issues of local economic development will enjoy elevation in our back to basic programme. One of the biggest problems of revenue enhancement systems in municipalities is caused by non-payment of services.”
Opposition parties expressed deep worries at the lack of compliance with supply chain management legislation, leading to billions in losses to municipalities. The DA specified that where the African National Congress governs, financial irregularity is rules.
In addition, Auditor General Kimi Makwetu also confirmed the fears that irregular and unauthorized expenditure has increased to about R30 billion.
Auditor Makwetu says that only the irregular expenditure has doubled in the last five years to almost R15 bilion.
“This irregular expenditure is where those prescribed rules that govern the procurement of goods and services, among others, are not always observed.”
Van Rooyen proffers that his department will focus on improving supply chain management controls at municipalities in order to address continued negative audit findings. He also added that the department will intensify financial management support to identified problematic municipalities.
“Improvement of our supply chain management systems is an area that is going to enjoy our focus going forward.”
This will go a long way in arresting the issue of revenue generation and collection in most municipal financial system.