Local Government, Environmental Affairs and Development Planning

1. The Western Cape is seen as one of the top performing Province’s in terms of achieving and maintaining positive audit outcomes, not only in its Provincial Departments and Entities, but also in municipalities. This achievement can be contributed to an integrated and coordinated response by al provincial departments, under the leadership of the Department of Local Government and Provincial Treasury. The Provincial strategy to embed good governance, enhance service delivery and improve financial sustainability include the following; structured Inter-Governmental engagements, the introduction and roll-out of tailor made support plans, support with audit readiness and hands-on support.

 

Overall, the municipalities in the Province maintained their audit outcomes from the 2015/16 to 2016/17 financial years with the exception of the City of Cape Town, Bitou Municipality, Beaufort West Municipality, Laingsburg Municipality and the Eden District Municipality who regressed.

 

(b)      The following are reasons for the regression as cited by the Auditor-General:

 

• Changes after the Local Government Election 2016 has caused some instability at council level and in key senior positions.
• Accountability failure pointing to governance, leadership and oversight lapses.
• Irregular, fruitless and wasteful expenditure are not reported appropriately to enable adequate consequence management. (AG Report 2016-17)

 

According to the auditor-general’s report, the City of Cape Town and Eden District were two of the three main contributors to irregular expenditure, with the former standing at R47 million and the latter at R32 million, with the total amount standing at R173 million in the province, a slight decrease from the previous term’s
R174 million.

 

R163 million relates to non-compliance with supply chain management (SCM) regulations and 98% of these SCM-related irregular expenditure involved current-year transgressions and these transgressions can be isolated to unjustifiable deviations, (which include) extension of contracts without the necessary approvals and non-compliance with local content prescripts.

 

The Auditor General ascribe the general regression as a result of a failure by municipalities to pay attention to the audit actions plans. Reasons for accountability failure included a lack of understanding of the SCM prescripts, unfilled vacancies, political instability and a high turn-over in municipal manager and chief financial officer positions after the 2016 elections.

 

In addition, the impact of the drought in the Province had far reaching consequences of which the associated pressure contributed to a significant amount of deviations especially in the field of supply change management.

 

(c)      Notwithstanding the challenges municipalities face on a daily basis from various fronts, the Department of Local Government and the Provincial Treasury will continue to ensure that good governance, effective service delivery and positive audit outcomes are maintained. An integrated approach to providing support is being followed in conjunction with various sector departments, such as Provincial Treasury. In this regard, a Joint Working Group was established between the two Departments that deal with matters of combined strategic importance in the municipal space while provincial strategic gaols, specifically PSG 5, have been

conceptualised to focus on integrated planning for impact and improved service delivery between the different spheres of government.

 

The Provincial departments of Treasury and Local Government are working together to improve governance.