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Sharing a media statement from the department of Cooperative Governance and Traditional Affairs:

Wednesday, 8 July 2020
Eastern Cape MEC of Cooperative Governance and Traditional Affairs (COGTA) Xolile Nqatha held a virtual special meeting with Executive Mayors and Municipal Managers of the Eastern Cape Municipalities; South African Local Government Association (SALGA); Provincial Treasury and the Auditor General of South Africa on Tuesday, 7 July 2020. The meeting was occasioned by the release of the consolidated 2018/19 Financial Year Municipal Audit Report by the Auditor General of South Africa.
The Auditor General report titled “Not much to go around, yet not the right hands at the till to reflect the state of financial management in local government” highlighted that there was a very weak accountability and consequent exposure to abuse of the public funds by municipalities.
MEC Nqatha expressed his unhappiness about the performance of the Eastern Cape municipalities and the disdain for the public funds. MEC Nqatha emphasised that it is the responsibility of all those in both political and administrative leadership of the municipalities to ensure that principles of good governance and sound financial management are adhered to.
He strongly condemned the barring of lines between those mandated with political leadership and those mandated with administration, and that the situation leads poor performance of the municipalities. He emphasised the need to professionalise government and ensuring that people focus on their roles as duly mandated by the Constitution of the Republic.
The Senqu Local Municipality is the only municipality in the province that received the clean audit. The leadership of Senqu LM shared their best practises with the rest of the municipalities including the importance of coherent political and administrative leadership to create conducive environment for good governance and efficient service to the people. The stable political environment and senior management echelon was the major contributor to their success including proper organisational planning that include projects in the preparation of annual financial statements from the beginning of the year, strong control environment that detect weaknesses on time and have preventative measure in place and taking corrective decisions.
The municipalities acknowledged their failures and pledged to improve their audit outcomes moving forward. The municipalities further requested that the Department of Cogta, Provincial Treasury and SALGA should enforce their support to the municipalities in order for them to get out of the red zone they are in.
The meeting acknowledged that some of the challenges facing the Eastern Cape municipalities are:
● Political instability
● Inadequate personnel in finance departments which has resulted to the use of consultants for financial reporting costing some municipalities more than R27 million.
● Unfunded budgets
● Lack of consequence management
● Non-functionality and at times deliberate weakening of the Municipal Public Accounts Committees (MPAC)
● Inopportune job evaluations amongst others.
The Provincial Treasury reported to the meeting that it has a plan in place to assist all municipalities that have received a disclaimer and adverse opinions and engagements with affected municipalities have already started. The aim of the plan by the Provincial Treasury which will be rolled out in collaboration with CoGTA and SALGA is to ensure that municipalities get out of the red-zone.
The Mayors and Municipal Managers of the eight disclaimed municipalities will sign the pledge with the MEC of COGTA committing to improve the audit outcomes and ensuring that audit action plans are adhered to. To this effect all municipalities will report monthly to both CoGTA and Provincial Treasury on the progress on audit action plans for effective support to be provided immediately where necessary. The support to the municipalities by CoGTA will be a targeted support focusing on the set of challenges facing each municipality.
The meeting underlined the importance of consequence management for wrongdoing regardless of the characters involved.
MEC Nqatha urged all stakeholders to emerge out of the meeting committing to turn the situation around. “We must commit and work to ensure that Local Government functions better, for it is the sphere close to the people. We must realise that, we have a responsibility to serve the people, to transform their livelihoods. Therefore, the province needs a joint effort by stakeholders in ensuring that good governance is adhered to for effective service of the people,” said MEC.
Issued by the Office of the MEC of CoGTA Eastern Cape.
For more information, please contact Mr Komisa on 066 381 8259 or Mr Ngam on 071 685 7981.