Clean audits are inseparable from service delivery, says auditor-general (AG) Tsakani Maluleke after attempts by President Cyril Ramaphosa to downplay the connection.
“Clean audits are foundational to good governance,” she says. “Without a clean audit, it is very difficult to tell a compelling story about the integrity of any institution. Clean audits deal with the credibility of financial statements, which you can only get if your financial management practices are sound. They deal with the usefulness and reliability of performance information. Clean audits speak to compliance, especially in the area of procurement and contract management.”
According to the AG’s audit report for the 2023/24 audit cycle, just 16% of municipalities received clean audits. The fact that they’re run by the DA prompted Ramaphosa to tell ANC councillors to learn from the DA.
When this incurred the wrath of his party, Ramaphosa went into damage control mode, saying there are ANC municipalities that may not have clean audits but can teach DA-run municipalities about enhancing development and transformation.
Says Maluleke: “Clean audits say that you’ve reported faithfully on how you deployed resources, that you’ve reported reliably on the achievement of your mandate and stated objectives, and that you’ve operated within the rule of law.
“These are the bare basics for any institution, especially in the public sector. So it is crucial that municipalities prioritise attaining and maintaining a clean audit. It’s on that basis that you can then start to have a progressive conversation on accountability for how you’ve looked after resources, accountability for how you’ve performed and delivered, and accountability for how you’ve operated within the rule of law.”
Where you’ve got institutional capability, that’s where you tend to have a clean audit. That’s why we see such a close correlation between a clean audit and the delivery of services and projects
— Tsakani Maluleke, auditor-general
Ramaphosa and ANC secretary-general Fikile Mbalula say that clean audits may be important, but they don’t capture the “lived experiences” of people.
“Maybe not, but they do capture whether an institution has the ability to make a solid contribution to the lived experiences of people,” says Maluleke. “A clean audit is the foundation of good governance. Good governance is about effective delivery, transparency and accountability. There is a very close correlation between clean audits, service delivery and transformation.”
Over time, the AG’s office has analysed what happens to people who live in clean audit environments and what happens to those who don’t, and has seen the correlation with service delivery.
“The clean audits are where you find that the grants that go to municipalities to implement infrastructure projects tend to be used, and used appropriately with a good quality of spend,” Maluleke says.
The AG’s data shows that municipalities that don’t have clean audits are the ones that send money back because they don’t have the capacity and capability to spend it or spend it well. They overpay for projects that are not delivered or are of poor quality. “So we’ve seen the correlation between a clean audit environment and the ability to apply the resources given to that environment appropriately and deliver goods and services in the way they are expected to.”
Downplaying the impact of a clean audit on the lived experiences of people living in a clean audit environment is an “unhelpful posture”, she says. The reality is that a clean audit environment indicates an environment characterised by political and administrative stability. Where there isn’t a clean audit environment the reverse is true.
“Where you’ve got institutional capability, that’s where you tend to have a clean audit. That’s why we see such a close correlation between a clean audit and the delivery of services and projects. Clean audits are an essential enabler of delivery and the ability to attract funding for infrastructure projects.”
Funding is cheaper for municipalities that have clean audits, because they are run well. For the same reason, well-managed municipalities with clean audits find it easier to attract investment.
You’ve got to think about whether we have the capability at those critical political and administrative levels that is commensurate with those responsibilities. And in far too many instances, the answer is no
— Tsakani Maluleke
“Private sector investment follows well-managed municipalities, and those are the ones with clean audits.”
The AG’s reports spell out very clearly for national, provincial and local government the enormous benefits of a clean audit and how to achieve a clean audit. So why have only 16% of municipalities received clean audits?
“Political leadership in terms of competence, ethical posture and discipline to do what they’re supposed to do is especially important in municipalities because significant levels of responsibility and authority are given to councils and the political executive, starting with the mayor. If you don’t have in those roles people with the competence, discipline and ethical posture to do their jobs, then we’re not going to win.
“We’ve also got to worry about capability at the administrative level. When a council is stable and effective, then they make it their business to hire professionals to lead the administration, give them space to do their work and monitor them.”
Maluleke says she’s “astounded” by the complexity municipal managers, executive teams, mayors and mayoral committees have to deal with. “So you’ve got to think about whether we have the capability at those critical political and administrative levels that is commensurate with those responsibilities. And in far too many instances, the answer is no.”
Elections will determine which political parties get the opportunity to deploy their leaders into particular structures. “It will be incumbent on those parties to make choices that will drive development and progress. If they don’t make the right choices, then we’ll all pay a heavy price.”
What happens at local government level is key to the economic growth of the country, and key to this is getting clean audits. “So the idea that provincial and national government need to also play their part in driving the professionalisation of local government must not be lost on us.”
Local government is not a sphere that needs to be autonomous, she says. “There are responsibilities that sit in the provincial government and legislature, and at the national level in the executive and in the National Assembly.
“If we don’t get everyone in that entire tent making sure that municipalities are able, politically and administratively, and that they are operating in a manner that responds to the development needs of the country, we will not get the progress we so sorely need right across the country.”
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