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Tabling his final audit report on municipalities of his seven-year term of office, Auditor-General Kimi Makwetu says there is not much to go by in terms of audit outcomes.

Makwetu said this when he released the report on the municipal audit outcomes for the period 2018-19.

Releasing the report, titled “Not much to go around”, Makwetu said the report painted an undesirable picture of billions of rand in funds allocated to municipalities being managed “in ways that are contrary to the prescripts and recognised accounting disciplines”.

“This title that is carried in this report was arrived at after a series of interactions that the office had with municipalities across the country and when we managed to drill down to all the financial statements of the entities that we were auditing and looking at all of them, we figured one of the key things we wanted to communicate as part of the audit results for this year was the fact local government, as it has been for many years, has not really had much resources to carry out its activities due to fiscal constraints as well as due to the economic headwinds that many of them had to face up to.

“However, we have also detected as we were going through these audits that we do not often find the right hands at the till – meaning that had those limited resources been under care and control with regards to the people looking after them as well as those that supervise the financial administration of local government, perhaps a lot more could have been achieved and perhaps a lot more could have arisen as a result of positive outcomes that we all were yearning for,” he said.

Audit outcomes at a glance

Releasing the report on Wednesday, the Auditor-General said there was again a regression in the audit outcomes.

He said over the three-year period, the audit outcomes of 76 municipalities regressed, with only 31 improving.

Makwetu said countrywide, 32 municipalities submitted their financial statements late and the financial statements of six were outstanding by 25 March.

“Not only did the unqualified opinions on the financial statements continue to show a steady decrease from 47% to only 43% (and a significant drop from 58% in 2016-17), but the quality of the financial statements provided to us for auditing again showed no improvement from the previous year.”

Makwetu also said that municipalities spent R1.26 billion on consultants for financial reporting services, of which only 7% was as a result of vacancies in municipal finance units. This amount includes R522 million for consultant costs at municipalities with outstanding audits where financial statements were received.

He said that the financial statements show increasing indicators of a collapse in local government finances – “we assessed 79% of the municipalities as having a financial health status that was either concerning or requiring urgent intervention. Just under a third of the municipalities were in a particularly vulnerable financial position”.

Auditor-General Kimi Makwetu says the Western Cape and Gauteng are two out of the nine provinces that developed characteristics of good governance.

Makwetu said this when he released his report on the audit outcomes of municipalities on Wednesday.

“Just looking at the map at a glance, you will see that the Western Cape and Gauteng are effectively the two provinces with municipalities that have developed characteristics of good financial management that have maintained disciplines of accurate and transparent reporting, that have been able to produce evidence with regards to a number of transactions that they have entered into and have reported on in the financial statements,” he said.

According to the Auditor-General’s report, Gauteng was the only province in which all the municipalities had unqualified audit opinions, but as in prior years, only Midvaal obtained a clean audit opinion.

This, however, continued to elude the other municipalities due to good financial accounting but inadequate monitoring of the preventative controls necessary to ensure compliance with legislation and accurate reporting on service delivery achievements.

The report also revealed that the largest concentration of clean audits remained in the Western Cape (45%), with 93% of the province’s municipalities receiving unqualified opinions on their financial statements.

Eight municipalities retained their clean audit status – six of which have maintained this status for the past five years or longer.

“However, if you look at the picture with regards to the rest of the other seven provinces, it is a mixed bag and I am sure you will not escape the dominant number of municipalities with [qualified findings] and [disclaimer with findings].

“When the auditors scrutinise these financial statements of the lot of these municipalities in the seven provinces, barring the Western Cape and Gauteng, we found a significant number of control failures when it comes to the disciplines of financial management,” he said.

Auditor-General Kimi Makwetu says government cannot afford to lose money because of neglect, inefficiencies or poor decision making.

Makwetu said this when he released the report on the audit outcomes for municipalities for the financial year that ended in March 2019.

“The levels of fruitless and wasteful expenditure have also increased. At the moment, in terms of all the municipalities that were audited, they have got an amount of about R2 billion worth of fruitless and wasteful expenditure.

“And this is expenditure that is incurred in vain that could have been avoided. However, if there were no proper systems of control, some of the expenditures are picked up after they have been incurred,” he said.

According to the report, which is on the Auditor-General’s website, over the three-year period, R4.27 billion of government expenditure was fruitless and wasteful.

In total, 91% of the municipalities did not comply with legislation. The outcome is similar to the previous year and slightly higher than the 85% in 2016-17.

The report cited a lapse in oversight and lack of controls relating to compliance in a number of areas, including supply chain management.

It also pointed to a regression in the compliance with supply chain management legislation since 2016-17.

The Office of the Auditor-General remained concerned that only 2% of the municipalities were fully complying with legislation, despite all the reporting and the amount of red flags that were raised.

“The levels of unauthorized expenditure are still high, where the levels of budgets that were agreed often exceeded, either because there were no plans for some of those projects that were implemented, or the estimates that were made in the beginning tend to be much lower than the actual expenditure that has been incurred.”

Meanwhile, irregular expenditure increased to R32 billion during the period under review.

According to the Auditor-General’s report, irregular expenditure increased to R32.06 billion from the R25.2 billion reported last year.

As the country’s COVID-19 cases surpasses the 150 000 mark, President Cyril Ramaphosa will host a virtual Presidential Imbizo on Coronavirus where you can engage him.

By calling the community radio toll free line on 0800 142 446 or using #PresidentialImbizo on social media, citizens across the country can submit their questions on the Coronavirus and its impact directly to President Ramaphosa.

The Presidential Imbizo, which will take place at 18:00 on Wednesday 1 July 2020, is a public-participation platform where communities are able to interact directly with government on challenges in society and where citizens are able to engage on community-generated solutions to such challenges.

Due to the COVID-19 pandemic, the Presidential Imbizo will take the form of a virtual engagement.

The Presidential Imbizo will be broadcast live on more than 80 community radio stations, TV channels and social media and communities are invited to participate.

The Estate Agency Affairs Board (EAAB) says it will not penalise estate agents who submit late audit records for the 2019/2020 financial year due to the COVID-19 pandemic.

“Audit reports are due annually by 30 June, but the board is cognisant that due to the COVID-19 pandemic and the national lockdown, several agents have not been able to complete this process,” EAAB CEO Mamodupi Mohlala said.

According to section 29(1) (b), 32(3) (b) and 32(4) of the Estate Agency Affairs Act, the audit of the business accounting records and the trust accounting records will be performed and finalised, and the auditor’s report on the trust accounting records submitted to the EAAB within a period of four months after the financial year end of the estate agent.

As a result of the far reaching consequences of the lockdown on the industry, Mohlala said the board has agreed not to impose penalties for late submissions.

The board is mindful of the challenges facing the industry due to the lockdown and wants to assure stakeholders that the regulator is working around the clock to find lasting solutions.

“In May, the EAAB made detailed submissions to the Department of Human Settlements on a raft of possible COVID-19 relief measures, which included the issues of extension of deadlines for audit reports and the deferment of Continuing Professional Development (CPD) fees. The EAAB is awaiting a response from the department on these and other issues, and will communicate the outcome as soon as it is received,” Mohlala said.

The board has acknowledged all estate agents, who submitted their audit reports under trying conditions.

Human Settlements, Water and Sanitation Minister, Lindiwe Sisulu, has issued a stern warning to those planning to or people who have already invaded properties – to desist from the unlawful acts.

“The department has noticed incidents in which people illegally occupy places of land, buildings and houses. Recent cases have been reported in Tshwane and Cape Town,” Sisulu said.

While acknowledging the challenges in the delivery of houses, Sisulu cautioned against the breaking of the law, as “this leads to forced evictions, displacement of people and delay in the implementation of housing projects”.

Townlands Housing Project to deliver 1 200 units

Meanwhile, Sisulu has recently visited three social housing projects in Tshwane, including one in Townlands which is expected to deliver 1 200 units on completion in 2021.

The social housing projects in Tshwane are some of the many across the country aimed at responding to the housing needs of households earning between R1 500 and R15 000 per month.

Good Practice Framework

The Minister was also informed that the Social Housing Regulatory Authority (SHRA) – an agency of the Department of Human Settlements, together with the National Association of  Social Housing Organisations (NASHO) – has worked on a Good Practice Framework which provides a number of guidelines on what precautionary measures to put in place to ensure safety of people living in the social housing units.

The guidelines include education on Coronavirus, hygiene and regulations, disabling of biometric systems, clear communication of protocols during COVID-19 period, and provision of alternative vacant for isolation of infected tenants where possible.

Sisulu said that the department understands that some of the beneficiaries are going through financial difficulties as a result of COVID-19.

The department has advised on types of rental arrangements they can make with tenants who have lost part or all of their income due to COVID-19.

“We are also in discussions with funders to determine what loan reliefs they can offer to delivery partners who have depleted their reserves due to a decline in rental collections,” Sisulu said.

The Minister also called on beneficiaries to honour their obligations and pay rent.

“We can only build a nation and continue to deliver more of these social housing projects, if we work together,” the Minister said.

South Africa recorded its deadliest 24 hours since the Coronavirus outbreak, after 128 people succumbed to COVID-19 on Tuesday.

Of the new deaths, 52 are from the Western Cape, 36 from Gauteng, 25 from the Eastern Cape, 11 from KwaZulu-Natal and four from Mpumalanga,  bringing the death toll to 2 657.

The number of COVID-19 cases has increased by 6 945 as the infection rate rose to 151 209, the Health Minister, Dr Zweli Mkhize, said.

The Western Cape is the hardest-hit province, with 62 481 cases, followed by Gauteng with 42 881, Eastern Cape 27 686 and KwaZulu-Natal 9 674.

Gauteng’s cases grew by 3 040 since the last report and the province is expected to be the epicentre, overtaking the Western Cape in the next coming days.

The North West has 4 187 cases, Free State 1 514, Mpumalanga 1 190, Limpopo 1 131 and Northern Cape 465.

The Minister said 1 630 008 tests have been conducted since the outbreak.

According to the World Health Organisation, there are 10 185 374 cases globally and 503 862 deaths, with 3 946 having been recorded on Tuesday.

The Portfolio Committee on Basic Education has welcomed the Basic Education Department’s state of readiness and plans as more learners are scheduled to return to school under level 3 of the COVID-19 enforced lockdown.

The Department of Basic Education briefed the Portfolio Committee on Basic Education, and the Select Committee on Education and Technology, Sport, Arts and Culture on the state of readiness to welcome more learners and educators to schools on Tuesday.

The department told the committee that more grades are expected to go back to school during the next phase on between 1 and 6 July 2020. This follows the first phase, which started with the return to school of Grades 7 and 12 in early June.

The department said the plan of reopening schools involves different models, which will make sure that only 50% of learners are present to allow social distancing in class.

The different models, the department said, include a situation where learners attend bi-weekly (week 1 – 50% of learners and week 2 – the other learners who did not attend in week 1), or learners rotating to be present at school every second day.

“The other model is where two groups of learners of up to 50% attend on a platoon basis (one group in the morning, and another in the afternoon),” the department told the committee.

Chairperson of the Portfolio Committee on Basic Education, Bongiwe Mbinqo-Gigaba, said the committee welcomed the department’s readiness and commitment to ensure that all health and safety protocols are observed, as well as its commitment to provide personal protective equipment (PPE).

However, Mbinqo-Gigaba said the committee members are concerned about the number of teachers and learners who have tested positive for Coronavirus, as well as teachers who are over the age of 60 years, who could be at risk due to underlying comorbidities.

“Committee members will, as part of their Parliamentary oversight responsibilities, continue to monitor the situation at schools to make sure that all the necessary regulations are adhered to,” Mbinqo-Gigaba said.

Public Works and Infrastructure Minister, Patricia de Lille, says government has signed off 12 properties in Gauteng and the Western Cape to be used as shelters for victims of gender-based violence.

The Minister said this when she participated in a debate on gender-based violence in the National Assembly’s hybrid sitting on Tuesday afternoon.

“As Minister of Public Works, I have signed an allocation of 12 properties in Gauteng and in the Western Cape for use as shelters for victims of gender-based violence, with more properties in other provinces to follow.

“The Expanded Public Works Programme (EPWP) has also recruited 319 workers so far across the 44 districts for municipalities to engage our communities on gender-based violence.

“[On 1 July], I will be meeting with all the MECs of Social Development in all nine provinces to impress on them the urgency of the need for collaboration to make this work and have these properties used for shelters for abused women and children,” De Lille said.

Incidents of gender-based violence and femicide sent shockwaves through the nation during lockdown. These include the murder of the pregnant 28-year-old Tshegofatso Pule, whose lifeless body was found hanging on a tree in Durban Deep in Roodepoort last month. Muzikayise Malephane, 31, the man accused of her murder, has been arrested and has already appeared in court.

During the debate, De Lille said gender-based violence is a disease that infects the whole of society. She said the scourge requires a societal response.

“We need to get back to the beginning to establish a new value proposition, new societal norms and the project begins in our homes, in our communities.

“We are blunting a boy’s emotions and raising them to believe that gender-based violence is how strong men express their power. We are training them to be soldiers, to wage war against our women and in doing so, we are perpetuating an ancient patriarchal framework that must change.”

De Lille said parents and guardians must lay the foundation for children to know, before they go to school, that discrimination – whether it is based on race, gender, culture or any other factor, is unacceptable.

“In South Africa, when another victim of femicide is on our TV screens… there is a competition of who can make the most dramatic speeches… We must learn to make sure that we include gender equality in our school syllabus and every single one of us has a responsibility to contribute to end this disease.”

Justice and Correctional Services Minister Ronald Lamola says 4 138 low risk offenders have been released on parole to ease prison population figures to minimise the risk of Coronavirus spreading in correctional centres.

Lamola said this when Ministers in the Justice, Crime Prevention and Security cluster fielded questions in the National Council of Provinces (NCOP) on Tuesday.

“Yes, minimum progress has been made due to the processes to be followed when releasing sentenced offenders on parole. On 11 May 2020, the department began with the process to release selected low risk offenders and initial releases started from 20 May 2020. As at 24 June 2020, the total number offenders released was 4 138,” he said.

This comes after President Cyril Ramaphosa approved the parole of about 19 000 low risk offenders in an effort to curb the spread of COVID-19 in overcrowded prisons.

As at 30 June 2020, the total number of confirmed COVID-19 cases in the Department of Correctional Services stood at 2 424, comprising 1 193 officials and 1 231 inmates. There are 705 active cases.

Responding to oral questions on Tueday, Lamola said prior to the releases, the total prison population stood at 154 943, with 101 928 being sentenced offenders, and 53 015 accounting for remand detainees and other unsentenced inmates.

“This translated to a total population of 30.68% overpopulation, which made social distancing difficult.

“After the releases as at 24 June 2020, inmate population was 147 922 consisting of 95 159 sentenced offenders, and 52 763 remand detainees and other unsentenced inmates, which brought the overcrowding level to 24.75%,” said the Minister.

Lamola said out of the total, 329 were released in the Eastern Cape, 730 in Gauteng, 882 in KwaZulu-Natal, 565 in Limpopo, Mpumalanga and North West, 634 in the Free State and Northern Cape, while the remaining 998 came from the Western Cape.

He said plans have been made to integrate such inmates back into society to avoid re-offending.

The department will implement a phased-in approach, stretching over a period of 10 weeks to allow for proper consideration of the qualifying offenders.

“The special parole dispensations do not qualify for automatic placement. A normal parole consideration process will be undertaken and the Parole Board will, among others, take into account factors that minimise risks during the consideratin process.

“The qualifying offenders will be placed into the system of Community Corrections to continue serving their sentences and comply with set conditions of placement. The department has the capacity to consider offenders and place those who will qualify,” Lamola said.

Only low risk offenders, who meet all the requirements and conditions, will be placed on parole.

“The requirement [is] that only offenders, who have undergone relevant rehabilitation programmes aimed at addressing their offending behaviour, would qualify for placement, as this would minimise the risk of re-offending.

“There are two additional requirements for placements on parole, including taking of fingerprints and DNA samples for comparison with the South African Police Services (SAPS) database as a prerequisite for placement.

“Every qualifying sentenced offender’s profile will be assessed and considered individually by the Parole Board before they make their recommendations for placement on parole.

“This will include affording victims the opportunity to make representations on why an offender should not be placed on parole,” said the Minister, adding that all relevant factors will be taken into consideration during this process, which will include any prior convictions for violent offences committed.