Kimi Makwetu. Picture: SUNDAY TIMES
Kimi Makwetu. Picture: SUNDAY TIMES

Auditor-General Kimi Makwetu has sharply criticised municipalities for ignoring his advice over the past five years, as their audit outcomes have steadily deteriorated.

Speaking at the release of the 2016-17 municipal audit findings, Makwetu said his office had been warning municipalities about their administrative lapses since 2013, to no avail.

"It is now five years later, and we are still faced with the same accountability and governance challenges we had flagged throughout these years. There has been no significant positive change towards credible results: instead we are witnessing a reversal in audit outcomes," said the auditor-general.

Only 33 municipalities got a clean audit in the 2016-17 financial year, which ended on June 30 2017. Of the 257 municipalities assessed by his office, the audit outcomes in 45 regressed, while only 16 improved. In 2015-16, a total of 48 municipalities got a clean audit.

Makwetu said the quality of financial statements submitted by municipalities had deteriorated, as only a fifth (22%) could provide financial statements without any material misstatements. Almost two-thirds (62%) of the performance reports submitted by municipalities had material flaws and were not credible enough for the council or the public to use.

Irregular expenditure increased from R16.2bn to R28.4bn in 2016-17, but R15bn of the total reported in 2016-17 related to irregular expenditure incurred in prior years.

Makwetu said 61% of municipalities failed to investigate unauthorised, irregular or fruitless expenditure incurred in 2015-16, a regression on the 52% figure reported in the previous period.

He said the audit environment in which audit teams had to work had become more hostile, with increased contestation of audit findings and threats to staff.

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