Every year we wait with bated breath for the auditorgeneral’s annual reports into how government departments and state agencies spend the money entrusted to them. And every year we hope that the picture will be different. It never is. Alongside Co-operative Governance Minister Pravin Gordhan, auditor-general Kimi Makwetu released the audits of municipalities for the 2012-13 financial year this week.
Although he was slightly sanguine, reporting 63 improvements and only 25 regressions, the picture is still dismal. It proves yet again that there is scant respect for the public purse and, more importantly, no regard for the urgency of delivery.
The money wasted and not adequately accounted for stands at R21.5-billion. This is not money that has been stolen, but money without a paper trail. The figure is made up of unauthorised spending of R9.2-billion, irregular spending of R11.6-billion and fruitless or wasteful expenditure of R814-million. Two years ago, half of this amount was unaccounted for. It has now doubled. Clearly the financial controls are not getting better. We also should not be too quick to breathe a sigh of relief that this is not money stolen. Stolen or unaccounted for, the end result is the same — less money for, and no tangible evidence of, delivery.
Before the private sector gets sanctimonious, its interaction with these municipalities demonstrates ethical and moral paucity. They are contributing to this quagmire by inflating prices and failing to deliver. Municipalities spent R700-million on consultancy fees, yet the financial statements and services provided by this sector were found to be poor. The cynics will say if municipalities are stupid enough to practically give money away, then others should grab it. It’s business and business wants to make money. At what cost though? It can be argued that if municipalities were familiar with the rules and regulations, they would spot a rip-off from a mile away and the unscrupulous businesses would not succeed.
Fair enough. But good governance is not just the burden of the public sector. Even though it is not directly handling taxpayers’ money, the private sector has a responsibility to play by the rules and not bankrupt the state because, in so doing, it is bankrupting poor citizens who have been waiting patiently for the elusive “better life”.
Let’s also remember that it is the recklessness and unfettered power of the private sector that sent the world tumbling to a brutal recession six years ago. The headache from that fall can still be felt around the world.
It is not just the financial controls of municipalities that concern me. The inability to trace and retrieve the money lost is of concern. We get glowing accounts in parliament of law enforcement agencies closing in on the wrongdoers and recovering the monies. But the figures are invariably a fraction of what has been stolen, wasted and unaccounted for.
I do sympathise, but Gordhan is off the mark when he says: “The journey towards excellence will be difficult.” “Excellence” is too ambitious a word.
Do those responsible for this mess want to be excellent? Are there mechanisms to isolate them? Or do we keep shifting the goalposts, setting new targets and continuing to employ the very people who are responsible for this sorry state of affairs?
This slight optimism by the minister and auditor-general must be seen in the context of the previous 2009 goal of achieving clean audits at all municipalities this year.
But five years later, only 9% have done so. Although this is an improvement on the previous year’s 5%, it is a shortfall of 91%. In addition, the report revealed that nine out of 10 municipalities and entities were not complying with the law. Perhaps let’s start the journey towards being “normal” first. Excellence seems out of reach, for now.
IMAGE CREDITS: http://www.thoughtpursuits.com/