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The Democratic Alliance (DA) welcomes the findings of the Auditor General’s Consolidated Local Government Audit Outcomes for 2009/2010, which names Cape Town as the only metro to have achieved each of the report’s 42 indicators of healthy financial management. This reconfirms Cape Town’s position as South Africa’s best-run metro.

Indicators measured in the report include cash flow, reserves, and the health of local governments’ balance sheets.

The report identifies Nelson Mandela Bay as South Africa’s worst-managed metro, and in particular notes concerns about Nelson Mandela Bay’s financial sustainability. The report also indicates a worrying trend of increasing irregular, fruitless and unauthorised expenditure across the country. The table below indicates how these three categories of financial waste have increased from 2008/2009 to 2009/2010:

2008/2009 2009/2010
Fruitless and Wasteful Expenditure R128 million R189 million
Unauthorised Expenditure R3.03 billion R5 billion
Irregular Expenditure R2.4 billion R4.14 billion
 

According to the report, the Auditor General is preparing to release a further document that will summarise information from all municipal audits for the 2009/2010 financial year. The DA welcomes the decision to release this document, as it will shed more light on the comparative financial well-being of South Africa’s municipalities.

The DA remains committed to ensuring that where we govern, we govern well. If a municipality is not able to manage its finances and operations effectively, it cannot deliver services optimally, which has a direct and negative impact on those most in need of services: the poor. That is why the figures contained in this report have very real implications for service delivery. Cape Town’s prudent financial management enables it to use resources to the maximum benefit of all residents – meaning the metro can afford to deliver better services to more people.