The Auditor-General has uncovered that 54 municipalities have collectively underspent their budgets by R3.7 billion.
Auditor-General Terence Nombembe released his annual report for the 2010/2011 financial year in Johannesburg today.
The Western Cape municipalities have the highest collective amount of underspending by municipalities.
Underspending has more than doubled from the previous year from R1.5 billlion to R3.7 billion, with more municipalities joining the trend. At least fifteen municipalities in the Western Cape have underspent by R1.5 billion, followed by Gauteng at more than R770 million.
Nine municipalities in the Eastern Cape, one of the poorest provinces, under spent by over half a billion rand. The Auditors-General has blamed the slow progress towards clean audits on lack of skills, even though 91% of municipalities hired consultants, as well as lack of consequences for poor performance and transgression.
The Auditor-General gave only 13 of the country’s 283 municipalities a clean audit.
The Auditor-General also found that at least R11 billion was incurred by municipalities in unauthorised and irregular expenditure.
Nombembe says one of the biggest challenges is in the issuing of tenders. “The identification of irregular expenditure is beginning. In instances where it is necessary to condone them in a manner not requiring law enforcement then that ought to be done. If it requires law enforcement, if people benefitted unlawfully, then so will be the case,”
