Auditor-General Tsakani Maluleke wants municipal officers to be held accountable for incurring unauthorised, irregular, wasteful and fruitless expenditure.
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The National Treasury wants to take on municipal officials who are responsible for nearly R151 billion in unauthorised, irregular, fruitless, and wasteful expenditure incurred by municipalities.
According to Auditor-General Tsakani Maluleke, municipalities must recover part of the nearly R151bn in unauthorised, irregular, fruitless, and wasteful expenditure (UIFWE) incurred by the country’s 257 municipalities.
Reports prepared by Maluleke show that municipalities have incurred R137bn in irregular expenditure, R8.5bn unauthorised, and R5.27bn fruitless and wasteful expenditure.
“Section 32 of the Municipal Finance Management Act (MFMA) establishes the legal framework governing municipalities' handling of UIFWE once it has been identified. The section does not primarily regulate how such expenditure is prevented,” the Treasury stated.
Treasury said: “Section 32 of the MFMA is based on the principle that municipal resources must be protected and that losses should not be automatically absorbed by the municipality when individuals are responsible for causing them.
“It introduces a statutory liability structure that complements, rather than replaces, common-law remedies and other legislation.”
Treasury means that Section 32 must be read together with labour law, criminal law, the Municipal Systems Act, the Municipal Supply Chain Management Regulations, the Municipal Regulations on Financial Misconduct Procedures and Criminal Proceedings (Financial Misconduct Regulations) and all other applicable legislation.
“The section, therefore, operates as part of a broader accountability system rather than as a stand-alone provision,” added the National Treasury.
The MFMA establishes who may be held financially liable in the event of UIFWE.
“It identifies political office-bearers, accounting officers, and officials as potential responsible persons and links liability to deliberate or negligent conduct. The subsection also confirms that statutory liability under the MFMA exists in addition to any liability arising from common law or other statutes,” Treasury stated.
The department added that there was a requirement for municipalities to move beyond disclosure and to identify whether a specific person’s conduct contributed to the expenditure.
The DA in Johannesburg welcomed the updated MFMA circular for better management of irregular, fruitless, and wasteful expenditure.
“Among others, this now allows for UIFW recovery if goods/services were not delivered. In Johannesburg, the city is facing an accountability crisis under the ANC-led coalition,” the party said.
The DA said in Johannesburg, the municipality is facing an accountability crisis under the ANC-led coalition.
“The DA will not accept this as the status quo and will not hesitate to start opening criminal cases against officials and politicians as per Section 173 of the MFMA, which deals with criminal liability relating to financial misconduct, providing allowances for criminal prosecution as a result of failures,” the party explained.