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Cost of corruption too high a price during pandemic

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Cost of corruption too high a price during pandemic

Cost of corruption too high a price during pandemic

14th August 2020

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The Democratic Alliance (DA) in the Northern Cape will request that thorough oversight over municipal affairs becomes a standing point on the programme of the Northern Cape Provincial Legislature. All partners in municipal financial management must step up to do their collective duty in holding municipalities to account for financial mismanagement, which places the service delivery to residents and the safety of communities at risk.

Our request is driven by the recently concluded cycle of virtual oversight meetings conducted by the Standing Committee on Public Accounts and the Portfolio Committee on Co-operative Governance, Human Settlements & Traditional Affairs. As we engaged with various municipalities in the past two weeks, it became increasingly clear that most municipalities in the Northern Cape lack either the political will or the institutional capacity to manage finances appropriately during this public health crisis.

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Audit outcomes for the 2018/19 year confirms that the fundamentals of proper financial management continues to be ignored and consequences for incompetence remains an illusion. The lack of basic accounting principles at the Kgatelopele Local Municipality, for example, led to force-balancing. Force-balancing is the use of deliberate miscalculations to balance the books. It is therefore nothing more than mathematical lies to cover the tracks of financial mismanagement.

But the only consequence is an audit report, which is filed in the municipal archives and forgotten. There are no investigations, there are no plans to prevent recurrences, and there are no repercussions.

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Financial mismanagement continues to compromise the financial health of municipalities. Even the Sol Plaatje Local Municipality, with its potential revenue base, cannot afford to pay suppliers within the desired timeframes. Cash-strapped municipalities complain that they cannot keep up with Eskom’s payments plans, resulting in unnecessary hardships for consumers who diligently pay their municipal accounts.

But while there is no money to pay suppliers and while there is no money to pay Eskom, there seems to be no end to the money paid in corrupt practices. The Emthanjeni Local Municipality, for example, regressed in its audit outcomes due to findings on its supply chain mismangement. The Auditor-General found too much evidence of uncompetitive bid processes and tenders being handed out to friends or family to be ignored.

And this is not an isolated incident.

We had cautioned before that the current environment creates fertile ground for financial crimes and corruption to flourish. Nothing we saw in the oversight meetings could allay our concerns and nothing we saw in the oversight meetings could show that municipalities can uproot financial maladministration from within.

At a time of public crisis, we cannot afford the cost of corruption in supply chain systems. It is too high a price to pay during a pandemic, when vulnerable residents are dependent on the municipal disaster plans to keep communities safe.

 

Issued by The DA

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