Improvements in operations and oversight duties within the municipalities will only be achieved if the technical abilities of Municipal Public Accounts Committees (MPACs) are significantly enhanced.
This is the view of Grant Thornton, head of Public Sector Advisory, and Terry Ramabulana, who recently conducted a South African Local Government Association (SALGA) workshop on Financial Management and Oversight for Councillors.
“Municipal Public Accounts Committees – which have the authority to question irregular, fruitless and wasteful expenditure – could dramatically increase municipal financial accountability,” says Ramabulana. “In addition compliance with the requirements of the Auditor General and assisting in offsetting service delivery protests would also be achieved.”
However, the committees have not yet realised the desired impact in achieving unqualified (clean) audits by the Auditor General, who recorded more than R2 billion in irregular municipal expenditure this year. In addition, more than R20 billion was irregular expenditure and there was also R2,2 billion in unauthorised expenditure reported.
According to last year’s Auditor General Reports, 22% of the government departments and public entities that report in terms of the Public Finance Management Act (PFMA) achieved clean audits. However, just a meagre 5% of those that account under the Municipal Finance Management Act (MFMA) achieved clean audits, which is very concerning.
The establishment of MPACs have been promoted by SALGA, National Treasury and the Department of Cooperative Governance & Traditional Affairs since 2011, in an effort to improve oversight and accountability in municipal spending.
“There is a distinct lack of technical financial insight which can only be gained through experience, formal education or both. Most councillors are not political careerists but have been given an opportunity to govern as the voice of their communities,” says Ramabulana. “When the members are appointed to the committees they do not get support, or the requisite respect from the authorities. They are not aware of the protocols and often are not seen as nothing more than a rubber stamp for municipal business.”
He continues to say that the situation could certainly be remedied by improved cooperation between government bodies including SALGA, CoGTA; the Auditor General and National Treasury who could provide the much-needed structure and guidance to the MPACs through one unified channel.
“It is encouraging to note that delegates’ want to improve skills to better manage these MPAC roles. Training will allow the councillors to think analytically and guide their questioning of the municipal office bearers on for example irregular expenditure or overspending,” he maintains.