Durban — More than R1 billion unused by 50 municipalities for community Integrated Development Plans (IDP) have been returned to the National Treasury as their financial year ended.
The Minister of Co-operative Governance and Traditional Affairs Thembi Nkadimeng raised concern that 43 municipalities are at the verge of collapsing because of money.
Nelson Mandela Bay, in the last term of 2016 to 2021, returned approximately R520 million allocated for human settlements and did not even build a single house, said Nkadimeng adding that more than R900 million was for the financial year which ended a few days ago.
“It is important for the Integrated Development Plan for communities to continue even though there is a change in leadership within a municipality,” she added.
In KwaZulu-Natal today, Premier Nomusa Dube-Ncube and Cogta MEC Bongiwe Sithole-Moloi are expected to hold substantial engagements with the local and district municipalities regarding the unfavourable audit outcomes.
The director at Statistics South Africa, Malibongwe Mhemhe, said a majority of the municipalities are using an abnormally high number of contractors to deliver services.
The report said municipalities often outsource work to consultants and private contractors. Mhemhe said local government spent R39bn on contracted services in the 2022 financial year, accounting for 8.4% of total expenditure. This is above the National Treasury norm of 2%-5%.
Mhemhe said that four municipalities spent no money (or 0% of total expenditure) on contracted services. At the other end of the scale, contracted services accounted for almost half of total expenditure in Dr Ruth Segomotsi Mompati District Municipality.
“Nationally, 52 of the country’s 257 municipalities were in alignment with the norm. The Free State registered the largest share of municipalities with 13 of 23 that complied,” said Mhemhe.
Mhemhe said if a municipality exceeded this norm, it could indicate that many functions were outsourced to private contractors, not efficiently utilised or that a municipality was struggling to build its own human capacity, increasing its reliance on private contractors.
“However, the national Treasury also notes that this ratio depends on the service delivery model that the municipality has adopted. Municipalities often struggle to find or attract the skills that they need, with contractors filling a vital gap,” Mhemhe said.
The head of provincial government communication Bongi Gwala said that despite intervention in terms of Section 139 of the Constitution, some municipalities have received unfavourable reports according to the latest review by the auditor-general.
“Instead of improving, some have suffered, among others, weakened administration including failure to appoint municipal managers, chief financial officers, non-functioning audit committees and even failed to approve budgets. These have led to regression in audit outcomes ranging from qualified to disclaimer opinions from the office of the auditor-general.”
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