South African municipalities spent R1bn on consultants in a single year, paying them to compile their financial statements for audit - but in some cases these statements were still not credible.
A major indicator of the weak state of internal controls and financial management disciplines was the quality of financial statements submitted to the AG for audit purposes, she said.
“In too many instances, the key disciplines of how we manage financials and how we manage performances are not in place. Another worrying indicator in local government is the continued reliance on consultants to help municipalities put financial statements together.” The Chris Hani district municipality in the Eastern Cape, for instance, received a combined total of R1.043bn in equitable share and conditional grants. At the end of the financial year, they had R42m in the bank — but there was little information on what the R1bn had been spent on, said the AG.
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