Latest news with #AGSA
IOL News
2 days ago
- Business
- IOL News
Auditor-General raises concern over governance failings in northern KZN municipality
KwaZulu-Natal MEC for Cogta Thulasizwe Buthelezi called to act on Umkhanyakude District Municipality Image: Supplied The Auditor-General of South Africa (AGSA), Tsakani Maluleke, formally instructed KwaZulu-Natal Cooperative Governance and Traditional Affairs (Cogta) MEC Reverend Thulasizwe Buthelezi to intervene in a northern KwaZulu-Natal municipality, citing serious governance and financial failings. The embattled uMkhanyakude District Municipality has come under renewed pressure after Cogta confirmed that the MEC had received formal correspondence from the Auditor-General requesting immediate intervention following the uMkhanyakude District Municipality's continued failure to address material irregularities. The AGSA's instruction is based on findings relating to the municipality's long-standing non-implementation of a credit and debt collection policy, as required under Section 62(1)(f)(ii) of the Municipal Finance Management Act (MFMA). 'The failure of the municipality to implement its credit and debt collection policy for a number of years and to take reasonable steps to recover outstanding debt from consumers is likely to result in a material financial loss for the municipality,' said Maluleke. The AG further noted that 'the failure of the accounting officer to take appropriate actions to address the material irregularity led to a decision by the AGSA's Material Irregularity Committee to approve reporting in the audit report of the municipality.' The correspondence defines a material irregularity under the Public Audit Act as a contravention of legislation or breach of fiduciary duty that results in, or is likely to result in, financial loss or substantial harm to a public institution or the general public. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading The MEC has until August 15 to submit a formal report to the AGSA on the steps being taken to address the matter. 'The department stated that the MEC will abide by the AG's request and comply with the given deadline,' a department spokesperson stated. The latest development comes in the wake of a standoff between MEC Buthelezi and uMkhanyakude municipal leadership earlier this month. On July 14, the MEC was forced to break locks and hold a meeting outside the municipal offices after the speaker and municipal manager allegedly blocked his access. During that visit, he announced that the municipality would be placed under administration in terms of Section 139(1)(b) of the Constitution and introduced Bamba Ndwandwe as the appointed administrator. He also revealed that a Section 106 forensic investigation had been launched to probe allegations of corruption and maladministration. After that incident, the municipality responded by rejecting the intervention, accusing the MEC of undermining local democratic processes and acting without due consultation. 'The intervention infringes upon the constitutional rights of the council… and creates an impression that elected representatives are dysfunctional, which is not a fair reflection,' Speaker T.S. Mkhombo had said in a statement at the time. Mkhombo argued that uMkhanyakude had made strides in stabilising governance and finances since the end of a previous intervention in April. The municipality also warned of possible legal action, saying it was exploring a review under the Promotion of Administrative Justice Act (PAJA). However, with the AGSA's direct involvement now confirming governance and financial management lapses, the pressure on the municipality's leadership has intensified. 'MEC Buthelezi holds the AGSA's office in the highest regard and is committed to acting in the interest of the residents of the uMkhanyakude District,' Cogta said. 'These residents bear the brunt of failed service delivery due to a lack of governance, financial, and consequence management measures within the District.' The municipality had not responded to a request for comment by the time of publication. THE MERCURY
The Citizen
6 days ago
- Business
- The Citizen
Auditor-General's war on waste and corruption yields R4.5bn
But it's a war that is far from won. A good outcome, but Auditor-General Tsakani Maluleke seems exasperated at the lack of accountability among those charged with spending public money. Image: Brand South Africa Auditor-General (AG) Tsakani Maluleke says R4.5 billion has been recovered over the last five years after being flagged as irregular. Some of this came from the recovery of part of the R700 million awarded by the Energy and Water Sector Education and Training Authority (Seta) for training programmes where little to no value was delivered, and in violation of National Treasury rules which require evidence of services rendered before payment. The R4.5 billion recovery over five years may seem like chump change given the magnitude of the problem confronting the AG. Its latest report on local government identifies R8.74 billion lost in 285 municipalities as a result of non-compliance with the law and suspected fraud. Speaking at a Centre for Development and Enterprise (CDE) presentation, Maluleke seemed exasperated at the lack of accountability among those charged with spending public money. 'I've been here at AG for 13 years and we've looked at this from every direction and concluded we have to look at governance. ALSO READ: Government overspent or wasted R49 billion since 2019, says Auditor General 'Basic management disciplines are not in place,' she said. Asked what improvements she observes, Maluleke pointed to the reduction in the number of disclaimers in AG audit opinions – down from 28 to 14 – and the not-insubstantial R4.5 billion recovery in funds. The recovery operations were fortified by changes in the law in 2019 that gave the AG expanded powers to demand action and accountability for material irregularities. These include payments for goods and services not received or of poor quality, penalties imposed on municipalities for non-payment of Eskom and water board bills, and revenue lost due to unbilled accounts or unrecovered debts. The AGSA's expanded powers allow it to issue stronger recommendations and refer cases to bodies like the Hawks or the Special Investigating Unit for disciplinary action. ALSO READ: 'Culture of lack of accountability': Government departments, SOEs rack up R120bn in irregular expenditure No easy task The perception of auditing as a safe and sedentary occupation was shattered by the recent murder of Ekurhuleni's senior auditor, Mpho Mafole. Mafole, a former Auditor-General South Africa (AGSA) staffer, was investigating R2 billion in missing funds when he was gunned down. 'We're under threat of violence every day,' said Maluleke. 'We must get to the bottom of who did what and why. Our thoughts are with his family.' With 4 000 staff, including 900 chartered accountants, the AG's office conducts over 1 000 audits annually across all public institutions, as mandated by Chapter 9 of the Constitution. These audits assess the credibility of financial statements, performance against objectives, compliance with the rule of law, and systemic issues in governance. The reports are intended for citizens, parliamentarians, ministers and departmental management, backed by actionable advice to improve operations. AGSA is one of the country's most respected institutions, having gained public trust by naming and shaming those involved in squandering or looting funds. Its independence is constitutionally guaranteed, making it one of only two global audit bodies with full autonomy, according to the World Bank. ALSO READ: Decisive intervention needed for municipal performance — BLSA Municipalities still an issue Municipalities, however, remain a weak link, with mayors, municipal councils and executive teams failing in their oversight duties. This extends to the provincial level, where many of the responsible leaders don't even bother to read the AG reports. 'When councils are unstable, performance suffers, budgets go unfunded, and infrastructure crumbles,' said Maluleke. Many municipalities misallocate grant funds to pay debts, like last year's Eskom bills, or hire underperforming staff instead of maintaining critical services such as water and electricity. This creates a vicious cycle: economic strain reduces ratepayer payments, squeezing municipal cash flow and crowding out essential infrastructure spending. Operation Vulindlela, set up by President Cyril Ramaphosa to reform the economy as a trigger for growth, shows spending on salaries in SA's cities increased 84% between 2010 and 2014, while property rates and service charges have virtually doubled over the same period. Of the eight metros in SA, only Cape Town achieved a clean audit, meaning it has credible financials and no significant non-compliance. Three metros received unqualified audits, but four – including Johannesburg – failed to present reliable financial statements. ALSO READ: SIU finds no corruption in City of Joburg but Auditor-General has concerns City of Joburg Joburg's deterioration at the hands of squabbling councillors is visible to the eye but preceding this was a steady weakening in its institutional capacity, marked by poor project management and irregular spending – including the award of R972 million in tenders to family members linked city officials and councillors for the extension of the BRT/Rea Vaya bus system in 2023. This was flagged by the AG for its potential conflicts of interest, though she says there is no law that specifically prohibits the award of tenders to close family members or business associates. The real question was whether the City of Joburg failed in its oversight duties. 'Joburg has high levels of irregular spending and does not seem to be getting [it] under control. The [city] council, speaker and mayor don't seem to be decisive,' she said. Maluleke attributes this to poor financial management, noting that municipalities often lack basic disciplines like matching budgets to performance goals. Operation Vulindlela's latest report (July 2025) echoes this, advocating for financial reforms to stabilise municipalities through better revenue collection and governance. High salary costs exacerbate the problem, with some municipalities prioritising personnel over infrastructure, a trend Maluleke links to weak councils fostering a culture of impunity. ALSO READ: Eastern Cape local municipality is the worst run – Auditor General Some bright spots It's not all doom and gloom. Midvaal in Gauteng, with clean audits for over a decade, exemplifies strong stewardship, maintaining quality roads and services. Maluleke's audit staff complain of speeding tickets because the roads in Midvaal are in such good order. The municipality's responsiveness is what sets it apart, said Maluleke, contrasting this with poorly run municipalities where living conditions deteriorate. The 2024 Public Procurement Act aims to close loopholes using technology for better oversight, but Maluleke cautions that no legislation works if rules are flouted without consequence. She advocates for stronger codes of conduct, skilled leadership, and internal controls to enforce accountability. AGSA has come under political attack from different quarters but remains steadfast, protected by rigorous, evidence-based processes. Maluleke doesn't sign reports herself; a qualified team ensures objectivity. 'We should never tolerate [audit] disclaimers,' she said. By referring cases to investigative bodies and pushing for governance reforms, there is hope that the war against impunity and waste will eventually win the day. But we're still a long way from that. This article was republished from Moneyweb. Read the original here.
IOL News
17-07-2025
- Business
- IOL News
Urgent financial recovery needed for Endumeni Municipality amid audit concerns
The Endumeni Local Municipality briefed the KwaZulu-Natal Legislature's Cooperative Governance and Traditional Affairs Portfolio Committee on the key challenges and potential implications of financial management. Image: Facebook/Endumeni Local Municipality The Endumeni Local Municipality's financial status is dire, with insufficient cash flow to sustain its operations, hindering sustainable service delivery. The municipality briefed the KwaZulu-Natal Legislature's Cooperative Governance and Traditional Affairs Portfolio (COGTA) Committee on the key challenges and potential implications of financial management. The municipality received a disclaimer audit opinion due to a lack of supporting documentation to support the financial information presented on their annual statements. The COGTA committee held the hearing to address concerns about financial mismanagement, project delays, and lack of accountability raised by the Auditor General (AG). Marlaine Nair, the KZN COGTA Portfolio Committee chairperson, said they held meetings with the worst-performing municipalities, which received adverse audits, disclaimer audits, and qualified audit reports from the Auditor General in the last financial year. Nair said this is an important part of their work in ensuring financial accountability, good governance, and service delivery. The Auditor General of South Africa (AGSA) 2023-2024 Municipal Finance Management Act (MFMA) audit outcomes for the financial year ended 30 June 2024, stated that minimal progress has been made to address prior year findings, with only four out of 26 previously reported findings successfully resolved. The AGSA stated that the lack of appropriate oversight and monitoring by leadership over the control environment resulted in non-compliances with legislation with the municipality having repeated non-compliance findings. The AGSA also found that there were weaknesses in procurement and contract management and also lack of accountability and consequences. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Irregular expenditure was reported at R21 million while unauthorised expenditure (UIF&W) incurred R70 million. The AGSA recommended: officials should be held accountable for the non-implementation of the audit action plan. mandating investigations into all instances of unauthorised, irregular, fruitless and wasteful (UIF&W) expenditure, and taking appropriate disciplinary or legal action based on the outcomes. Ensure that management implements a financial recovery plan to restore financial health, focusing on revenue enhancement, expenditure controls, and cash flow management. Strengthen oversight by ensuring that the budget reviewed and approved is credible and funded- supported by realistic revenue projections and cash flow forecasts. The municipality also stated in its report to the committee that the total debt for the municipality is approximately R228 million. The highest debt is owed by households with debt amounting to R157 million. The municipality stated that commercial debt is R51 million while organs of state owe R20 million. The municipality stated that the highest debt is owed by Provincial Works, which COGTA has facilitated an engagement with to get this debt paid. The municipality reported that quarterly government debt engagements are held to resolve all the disputes between government departments and municipalities. Nair described the meeting as a resounding success, adding that members of the legislature were able to fully understand what drove long-standing problems and what was being done to resolve them. 'The legislators were also able to recommend practical solutions and clear follow-up steps for this committee and for the provincial government,' she said. The municipality falls within the Umzinyathi District Municipality and covers towns such as Glencoe and Dundee.
The South African
30-06-2025
- Business
- The South African
Gauteng's best-run municipality is a riverside city escape
The office of the Auditor General of South Africa (AGSA) recently published its annual review of local municipalities, including the best-run ones. As reported by BusinessTech , the audit covered results for the 2023/24 financial year and revealed the best-run municipality in the country, as well as in each province. The AGSA listed the 25 municipalities in the country that had achieved consecutive clean audits. Most of these municipalities were in the Western Cape, but the best-run municipality outside of the province was one in Gauteng. According to the results of the audit, Midvaal was the best-run municipality outside the Western Cape. This municipality in the south of Gauteng, maintained its clean audit status for 11 consecutive years, making it one of the best-run municipalities in all of South Africa. 'Midvaal prides itself on a well-governed, effectively managed, financially viable and sustainable local government,' the municipality said, as per BusinessTech . 'We are a municipality committed and dedicated to creating an environment conducive to social and economic development.' it also said. The municipality is located within the Sedibeng District, in the Southern region of Gauteng and stretches over 1722km² with a population of 111 612. A quieter contrast to city life, Midvaal offers boating, fishing, and water sports at Vaal Dam and Marina. Some outdoor offerings include Suikerbosrand Nature Reserve, hiking trails like Klipskuur/Klipkraal, croc ranches, as well as fun, treetop adventures. As per property data, house prices in Midvaal range from R900 000 for smaller one-bedroom apartments to about R3 million for more spacious full-title homes with five or more bedrooms, meaning one would need to earn between R32 000 and R102 000 per month to buy a home in this Gauteng municipality. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
IOL News
26-06-2025
- Business
- IOL News
South Africa's unique audit mandate influences global peers ahead of SAI20 summit
Auditor General Tsakani Maluleke speaking duiring the SAI20 Supreme Auditors Summit 2025. Image: Supplied The Auditor General of South Africa (AGSA), Tsakani Maluleke has underscored the significance of the country's distinctive mandate to audit all public institutions annually. This capacity, not commonly shared by her international counterparts, is increasingly admired globally as a model for promoting accountability and transparency in public finance. Addressing the media on the Supreme Audit Institutions of the G20 (SAI20) in Johannesburg, Maluleke expressed concern that the unique perspective of the AGSA often goes unnoticed. "Not every AG sees all the states in the way AGSA does. Sometimes I fear that gets lost when we issue a general report which gives you a sense of not just on municipality but what is happening across the country," she said. "It is the perspective that is unique to AGSA in this country but it also a perspective that is becoming more and more aspirational for our peers across the globe." This perspective, according to Maluleke, is vital as it provides citizens, administrators, parliamentarians, councils, and municipal executives with crucial information to inform decision-making processes. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ "One of the things unique about SAI and team AGSA is that the Constitution requires that the AG audits every public institution every single year. The public audit act also provides that the AG must look at financials, performance information, compliance and internal controls," Maluleke said. She said SAI20 had come up with a good series of conversations that have culminated in the consesus-driven Communique. The SAI20 summit aims to explore developmental themes such as unlocking public infrastructure funding to foster equality and enhance citizens' quality of life. Another key focus will be on bridging the skills gap to prepare a future-ready workforce, signalling a collaborative approach to economic growth that prioritises sustainability. Maluleke said SAI20 sets out the service of what the Supreme Audit Institutions are going to start doing differently in countries as they audit independently, the type of focus areas they will choose, the type of perspectives they will focus on and how they will engage with that work. This will also include recommendations for implementation for AGs. "The second, perhaps there are things we can start to recommend to governments that will will help them to start making gains in the two things," Maluleke said. Addressing concerns regarding municipalities' preparedness for the upcoming G20 meeting, especially given that only 41 of 257 municipalities achieved clean audits, Maluleke stressed the importance of focusing on infrastructure projects. "The work as team AGSA has taught us what goes wrong, how to frame our recommendations to governments, how to resource our teams," Maluleke said. "Team AGSA is no longer resourced by people who are bean counters but supplementing to include engineers and quantity surveyors so that the work we do provides credible insight and is impactful. We were able to bring lessons such as that to a room full of other AGs."
