OUTA Sounds Alarm: Imminent Chaos Looms Over Failing Municipalities

The Organisation Undoing Tax Abuse (OUTA) has sounded an alarm over the state of financial management and service delivery across South African municipalities, predicting catastrophic consequences if swift reformative measures are not adopted. This call to action follows the Auditor-General's report for the 2022/23 audit outcomes of local government, which unveiled a staggering decline in governance quality.

Echoing the concerns of OUTA, the report reveals a mere 13% (34) of municipalities achieved clean audit statuses—a figure signaling a stark drop and indicating systemic failures. Julius Kleynhans, OUTA’s Executive Manager for Local Government, has called attention to the decreasing trust of communities in their local governments, emphasizing that the disarray compromises essential service delivery and responsible management of public resources.

With 43% (110) of municipalities receiving unqualified audits with findings, and a concerning 33% (85) qualified audits; the situation is further compounded by 5% (12) of municipalities showing disclaimed findings and 2% (6) marked by adverse findings. The Auditor-General's report further points out critical issues such as non-compliance with strategic planning laws, poor project and contract management, and prevalent unauthorized and wasteful expenditure, totaling a whopping R21.12 billion in unauthorized expenses and R7.41 billion in wasteful expenditure.

The negligence has real-life impacts, most notably reflecting on the degradation of service delivery, where municipalities fall short of providing basic services like water, sanitation, and waste management. A sample audit of municipal projects revealed deficiencies in 72% of cases, marked by project delays, quality concerns, and rampant infrastructure deterioration, stretching the urgency for reform.

OUTA endorses the Auditor-General's call for swift professionalization of municipalities. Kleynhans emphasizes the need for an ethical culture and accountability within the local government system. He underlines the importance of intergovernmental support, reinforcing that the time for decisive leadership and transformation has arrived. The alternative, he warns, would be catastrophic for South Africa as a whole.

OUTA's commitment to advocate for better governance and transparency is steadfast, as they encourage communities to increase pressure for accountability in the management of public funds. The organization lauds the Auditor-General and her team for their exemplary transparency and reporting, showcasing it as a standard for other government institutions.

Furthermore, OUTA draws attention to the startling fact that over 42% of municipalities have unfunded budgets, a clear violation of the Municipal Finance Management Act (MFMA), carrying the potential for heavy penalties and interventions by provincial treasuries. This includes possible disciplinary action against municipal officials and withholding of funds, hammering home the organization's stance that the time for change in local government is not just necessary, but critical.