Tag Archive | minister Collins Chabane

AG report: National intervention needed with failing municipalities

Commenting on AG Terence Nomembe’s report on the poor municipal returns this year, the financial and fiscal commissioner, Bongani Khumalo, told a special press gathering  that a point had to be created legislatively in the national and municipal finance rules where national intervention had to kick in.

The release of the Auditor General’s report this year was accompanied by the presence of not only minister in the presidency, Collins Chabane, but also the minister of finance, Pravin Gordhan, and minister of co-operative government, Richard Baloyi.

All appeared to be in support of the auditor general, Terence Nomembe, who conveyed to the media present that a mere 5% of the 283 municipalities in South Africa had received totally clean audits.

Gauteng, the largest of the audits in monetary terms, remained a constant worry, the AG said in his report, with no improvement over last year with its qualified report. Quite clearly its chaotic billing situation and tendering processes have left auditors in the cold as well as in the dark.

Five provinces, which included Gauteng, but also including North West, Free State, Northern and Eastern Cape could not claim one municipality with a single clean report; the final tally of clean reports being only a mere thirteen.  The “fruitless and wasteful expenditure” totals for all nine provinces, amongst the 283 municipalities, increased from R6bn in 2010 to R10bn this year.

53% of the municipalities received qualified, or what may otherwise termed as bad, reports but on a more positive note Nomembe drew attention to the fact  that once a large number of municipalities learned of their status, corrections were made and about 45  corrected the result to the AG’s satisfaction.

Among the issues identified as “challenges” were procurement, service delivery, and errors in financial disclosure. The municipalities with clean audits were in KwaZulu-Natal, Limpopo, Mpumalanga, and the Western Cape. The Western Cape had a problem that five reports were not submitted on time.

Said commissioner Khumalo, “The next step will have to be more rigid legislation, the finance and fiscal commission laying some of the blame with shortcomings in the Public Finance Management Act. (PMFA) on intervention processes.

Whilst the PMFA has been setting norms and standards successfully at national level, the commission says that this is not translating down to lower level tiers of government. Whilst the Municipal Finance Management Act (MFMA) allows national government to intervene it is only at cabinet discretion and is therefore a cabinet decision, Khumalo said.

Minister Gordhan promised amendments to national legislation insofar as it affected provincial and local government relationships. Western Cape premier Helen Zille said in a separate statement on the subject immediately after the media meeting that the national government had been deaf to her pleas on this same subject.

Posted in Cabinet,Presidential, Finance, economic, Justice, constitutional, Public utilities, Uncategorized0 Comments

Treasury says it has plans to cut down on tender fraud

Finance Minister, Pravin Gordhan, in replying to a parliamentary written question on what government was doing about malpractice in state tenders and overpricing of goods and services supplied on government tenders, has replied that National Treasury is developing  a “national pricing system” to be adopted by departments in such instances where government is paying outside providers.

The written reply did not give any indication of the levels of government to which such new plans might apply.

Such measures, the minister replied, would improve government’s ability to monitor transactions and help detect fraud at an earlier stage. Also there were plans to introduce more transparency in the procurement process itself, including the necessity to declare and provide reasons for awarding a particular contract.

More centralised control was to be sought when high-value goods were purchased, the minister wrote, and penalties such as double the contract value were envisaged.

In a separate platform before Parliament closed, Pravin Gordhan drew the attention of parliamentarians to the fact that a higher level of integrity was also called from the private sector when dealing with state officials, in particular in the way that they tendered for government business and the prices that were charged.

He also drew attention to the fact that taxpayers themselves were getting wary of the misuse of public funds by government, pointing to the fact that the auditor general had recently summated in their published annual reports of the previous financial year that the public sector had fruitless and wasteful expenditure of R30bn.

In a separate media briefing later, minister Gordhan shared the platform with minister Collins Chabane, when the South African Auditor General  Terence Nombembe presented in annual report on government departmental audits to Parliament, which amplified on the issue of “fruitless and wasteful expenditure” by government officials and also underlined the inadequacies of municipalities throughout South Africa insofar as financial management, procurement and tendering processes were concerned.

Posted in Cabinet,Presidential, Finance, economic, Public utilities, Security,police,defence, Trade & Industry, Uncategorized0 Comments

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