5 Munipalities Guilty Of Worst Fruitless Spending


While state government fights to end wasteful and bogus expenditure, more reports keep coming about how various municipalities indulge in the fruitless spending.

A recent audit from the Auditor-General(AG) reveals that five municipalities were responsible for 59% of total fruitless spending in the 2014-2015 financial year.

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The audit report shows R3.741 billion has been lavished by various government departments. This amount represents an increase of more than 50% over a five-year period.

Of the country’s 278 municipalities, 227 incurred fruitless and wasteful expenditure, with five municipalities contributing 59% of total fruitless spending in the 2014-2015 financial year.

They include:

  • Nelson Mandela Bay metro in the Eastern Cape with 10 instances of fruitless expenditure amounting to a total of R423 million;
  • Matjhabeng in the Free State, with 32 instances totalling R152 million;
  • Emalahleni in Mpumalanga was responsible for R95 million worth of fruitless expenditure from 40 instances;
  • Maluti-A-Phofung in the Free State came in fourth place, with R78 million from 113 instances;
  •  Thaba Chweu in Mpumalanga with 322 instances of fruitless expenditure amounting to a total of R36 million;

The AG however, notes that not all of the expenditure should be seen as illicit, corrupt expenditure, but rather reflects systemic problems with compliance.

The report states that some of the most common areas of non-compliance in the last five years is “material misstatements in submitted financial statements, management of procurement and contracts, and the prevention of unauthorised, irregular as well as fruitless and wasteful expenditure”.

 Meanwhile, Gauteng government said on Tuesday that it’s at war with the province’s wasteful expenditure.

Finance MEC Barbara Creecy delivered her medium-term budget policy statement and the 2016/2017 adjustment budget.

 There, she highlighted an improvement in the 2015/2016 audit outcomes by the provincial departments, all of which obtained unqualified audits.

Creecy also said the provincial government has drastically refused fruitless and wasteful expenditure.

“Our war on wasteful expenditure is succeeding. Last year GPG dramatically reduced fruitless and wasteful expenditure, including interest paid on overdue accounts and litigation settlements by 93%, from R415 million the previous year to R29 million in this 2015/2016 financial year, a significant saving of R386 million,” she said, adding that the efforts yielded many profits because last year, 10 out of 14 departments paid 90% of their invoices within 30 days.

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Creecy further disclosed that she has written to MECs who lead departments that incurred irregular expenditure, asking them to investigate the incidents and conduct disciplinary processes against certain officials.

The Gauteng government said its economy is expected to grow by 0.8% this year, above the national economy.