Co-operative governance and traditional affairs minister, David van Rooyen has urged municipalities to be “frugal” with what little revenue they get.
The minister was speaking in an interview with Business Day, and said that state funds are tight and that government is doing its best to make sure whatever funds are available to local government is being used.
Treasury is currently under a lot of strain, having to bail out state companies such as SAA and Sanral, while also ensuring municipalities have enough funds for infrastructure projects.
Municipalities are in a mess of their own, with 27 owing R4 billion to power utility, Eskom; millions owed to Sanral in e-toll bills; and certain areas facing further strain from retrenchments in some industries.
All this against a backdrop of extremely low economic growth – under 1% according to the latest IMF projections.
In the 2014/15 financial year, national and local government chalked up R25.7 billion in wasteful and irregular expenditure; this was down 27% from the previous financial year, but was not enough to spare certain municipalities from forcing government intervention.
The auditor general revealed in June 2015 that 264 South African municipalities incurred R11.5 billion in irregular and wasteful expenditure – R687 million of which was a complete write-off.
“We need to work with municipalities to improve their financial management,” van Rooyen said.