Wasteful spending at metros balloons

| 0 Comments

 

municipality.jpgMOST of the country’s big cities have increased their "fruitless and wasteful" spending in the last financial year, despite some of them receiving kudos from international rating agencies.

Nelson Mandela Bay metro was the worst offender, according to auditor-general Kimi Makwetu’s 2014-15 local government audit report, released on Wednesday.
Managerial capacity at the country’s metros is expected to be vastly better than that of local and district municipalities, as they have larger budgets and were likely to attract skilled managers to oversee their finances.

Out of the total of R1.3-billion fruitless and wasteful expenditure incurred by the country’s 272 municipalities — up from R685-million the previous year — Nelson Mandela Bay was responsible for R423-million. This was a whopping increase from R10.6-million in the 2013-14 financial year.

Free State-based Matjhabeng Municipality, while not a top-tier council, was one of the worst offenders. Together with Nelson Mandela Bay, it accounted for more than half of the wastage.

All three of Gauteng’s metros regressed in their efforts to curb wasteful spending.

Buffalo City metro in the Eastern Cape improved in cutting wastage from R4.7-million in 2013-14 to R480,000, while eThekwini and Cape Town incurred no wastage. This was the second year eThekwini incurred no losses in this area, while Cape Town improved from R290,000 to nothing.

According to Makwetu’s report, irregular spending — another category of the reckless management of the public purse — amounted to R14.75-billion in the 2014-15 financial year, up from R11.76-billion the previous year.

Topping the list in irregular expenditure was Rustenburg in the North West (R3.06bn), followed by Nelson Mandela Bay metro (R1.34-billion), City of Tshwane (R1.10-billion), Buffalo City metro with R479-million and uThukela district with R324-million.

Karen Heese of Municipal IQ, said these high numbers reflected poorly on leadership in the metros.

"It’s not ideal. On the one hand, the defence is that there are such massive budgets being dealt with."

"But on the other hand, it is equally important that there is clean auditing because of the size of it. It’s a double-edged sword," she said.

In general, Makwetu lauded SA’s municipalities for the improvement in overall audit results — the number of municipalities that received clean audits increased from 40 in the preceding year to 54 in the 2014-15 financial year — claiming that it was possible to show improvement despite the surge in fruitless and wasteful spending.

It was a "conundrum" that despite the good outcomes, wastage levels were still high.

This article first appeared in Business Day

Leave a comment


SmartProcurement Newsletter
X

Please enter your details below to receive the SmartProcurement Newsletter for FREE on a regular basis.

As part of the SmartProcurement Newsletter you will be receiving World Class Procurement News, Tools, Tips, Tactics, Procurement Training updates, Upcoming Events, and the latest Procurement Career Openings.

* Email Address:
* Title:
* First Name:
* Surname:
* Company:
  Position:
* Country:
* Public / Private:

 

Career opportunites

Marketing Executive

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
Geographical Area: Midrand GautengSalary: Market related2 Years Marketing ...More

Head: Supply Chain Management (P6)

  • <500 000 >500 000 Limpopo Permanent Procurement Management Supply Chain
North east of the Tropic of Capricorn, just ...More

Purchasing and Supply Manager

  • <500 000 >500 000 Gauteng Permanent Procurement Management Supply Chain
Purchasing and Supply ManagerThe CSIR has a vacancy ...More

Senior Manager Public Sector

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
 Senior Manager Public SectorTotal Cost to Company: R1.1mil ...More

Senior Manager: Mining

  • >500 000 Gauteng Industrial Engineer Permanent Projects / Category Management
Senior Manager: MiningTotal Cost to Company: R900k – ...More

SUPPLY CHAIN MANAGER

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
SUPPLY CHAIN MANAGER(Total Cost to Company R750k – ...More

Master Data Management Advisor

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
 MASTER DATA MANAGEMENT ADVISOR(Total Cost to Company R750k ...More

PRO - Performance Reporting

  • >500 000 Permanent Procurement Consultant Procurement Management Projects / Category Management
PRO - Performance ReportingTotal Cost to Company: R800k ...More

PRO - Risk & Governance

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
PRO - Risk & GovernanceTotal Cost to Company: ...More

Supply Chain Site Manager

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
Supply Chain Site ManagerTotal Cost to Company R1mil ...More

Chief Financial Officer

  • >500 000 Gauteng Permanent Procurement Officer / Specialist
Chief Financial OfficerTotal Cost to Company R1.5mil – ...More

Process Engineer- WMS

  • <500 000 >500 000 Industrial Engineer Permanent Projects / Category Management Western Cape
Process Engineer- WMS(Total Cost to Company R350K – ...More

Forecast Analyst

  • <500 000 Analyst Permanent Procurement Management Western Cape
Forecast Analyst(Total Cost to Company R350K – R500K) Location: ...More

Group Category Manager: Indirects

  • >500 000 Permanent Procurement Management Projects / Category Management Western Cape
Group Category Manager: Indirects(Total Cost to Company R700K ...More

Group Category Specialist: Chemical

  • >500 000 Gauteng Permanent Procurement Officer / Specialist Strategic Sourcing
Group Category Specialist: Chemical(Total Cost to Company R700K ...More

Sourcing Specialist - 3rd party

  • >500 000 Gauteng Permanent Procurement Officer / Specialist Strategic Sourcing
Sourcing Specialist - 3rd partyTotal Cost to Company ...More

Global Procurement Lead (Processing)

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
 Global Procurement Lead (Processing)Location: JohannesburgTotal Cost to Company ...More

Global Supplier Performance Manager

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
Global Supplier Performance Manager Location: Johannesburg  Cost to ...More

Group Customer Service Lead

  • <500 000 >500 000 Analyst Gauteng Permanent Procurement Officer / Specialist
Group Customer Service Lead  Location: Johannesburg As the ...More

Business Intelligence Manager

  • <500 000 >500 000 Gauteng Permanent Procurement Management Supplier / Business Development
Business Intelligence Manager Location: JohannesburgLead the development, implementation, optimization ...More