South Africa: No ‘one-size-fits-all’ governance framework anymore

South Africa is no longer enforcing a ‘one-size-fits-all’ governance framework that applies uniformly to cities, small towns and remote and rural areas, which it is now calling “an anomaly”. In reality they are very different places with different needs and capacities. This is one of the recommendations emerging from the State of Local Government in South Africa report COGTA 2009 that will also have impact on the water and sanitation provision in the country.

The assignment framework (2007) for the assignment of powers and functions, and many other governance arrangements in South Africa, such as integrated development planning and financial reporting, did not take into account the significant capacity and functional capacities of the different municipalities.

This has led to the realisation that the ‘one-size-fits-all’ framework for functional responsibilities is not based on differing municipal realities. The unintended consequences for municipalities has in some instances, led to what may be defined as levels of municipal non-viability, both financially and in respect to functional performance, socio-economic vulnerability and ability to manage infrastructure development and investment.

Special legislation and functional planning authority for metros

Cities such as Cape Town, eThekwini and the Gauteng complex for example, may require special legislation and functional planning authority to maximise their role in building the national economy, whilst rural municipalities in former ‘homeland’ areas for example, need to be released from the complexities of compliance with an integrated development plan that is way beyond their capacity to implement.

Spatial differentiation needs to be applied to which specific institutional and administrative mechanisms are needed to address the needs of communities living in remote areas with high backlogs, poor economic potential and high unemployment. The application of policy, planning and the allocation of powers and functions between the different spheres of government will have to take note of the vast differences between municipal spaces across the country.

More than half of municipalities get qualified, disclaimer or adverse audit opinions

The State of Local Government in South Africa report also quotes evidence that, in aggregate, the demands of a growing economy are no longer being met by the levels of municipal investment. Challenges with regard to financial management identified in municipalities during the assessment of the state of local government are not new and have been identified in reports from National Treasury and the Auditor-General.

Poor financial management and lack of controls and accountability systems impacts negatively on service delivery for communities, from lack of provision of water and other services to inadequate funds for technical equipment for servicing basic infrastructure. Although there has been a reduction in the number of disclaimed and adverse audit opinions for municipalities, from 99 disclaimed opinions for the year ended June 2007 decreased to 86 (35%) for the year ended June 2008, more than a third of the 283 municipalities obtained either disclaimers or adverse opinions. A further 57 municipalities received a qualified audit opinion in 2007/8, which bring the total of municipalities with qualified, disclaimer or adverse opinions to 152 (54.4%).

Furthermore, forty-five per cent of municipalities (67) compared to 38% in the prior year had findings on unauthorized and fruitless and wasteful expenditure leading to qualifications in this regard.

The number of outstanding audits has also increased dramatically since the previous financial year. Another 38 (13.4%) municipalities were not included in the AG’s 2006/7 report due to capacity constraints in finalising prior year audit backlogs and annual financial statements that were not submitted on time. This represents a significant deterioration with the previous year when 13 municipalities (4.5%) were not included.

“Operation clean audit 2014”

The Auditor-General’s report has identified a lack of controls, mismanagement and lack of governance principle as the key reasons for the state of despair in municipalities. The Department of Co-operative Governance and Traditional Affairs has launched an “Operation clean audit 2014” campaign on 12 August 2009. The aim is to address audit queries in a sustainable way to improve service delivery and ensuring that by 2011, all municipalities and provincial departments have dealt with the causes of disclaimers and adverse opinions.