Moves afoot to limit reliance of municipalities on private consultants

The department of cooperative governance and traditional affairs (Cogta) in the Eastern Cape is pulling out all the stops to reduce the expenditure of municipalities on consultants.

Auditor-general Tsakani Maluleke last week revealed that 33 of the Eastern Cape’s 39 municipalities (85%) used consultants to manage their finances and spent R154.88m to do so in the 2021/2022 financial year.

In the previous financial year, 31 municipalities in the province forked out R137.27m on consultants.

Cogta MEC Zolile Williams’s spokesperson, Pheello Oliphant, said the department had embarked on a continuous aggressive upskilling programme with municipalities.

“We have sent officials from the department to the 39 municipalities to help train them with budget planning, budget implementation, budget monitoring, budget evaluation,” Oliphant said.

“We have rolled out the risk adjusted strategy plan to help municipalities to plan their projects a year ahead so that when they encounter problems in their projects, they can speak to Cogta and the provincial treasury well in advance for intervention.

“All mayors, municipal managers and CFOS have been trained on the risk adjusted strategy.”

Oliphant said one of the critical challenges confronting the municipalities was the skills deficit in financial and management accounting and in engineering. “This is where the problem is,” Oliphant said.

“Furthermore, the consultants who do work for the municipalities do not want to impart or transfer skills to municipal officials because they will not be needed should the municipal officials be well equipped.

“Municipalities should train and retain the officials.”

Oliphant said the trend during the last few decades was that the well-trained municipal officials, including CFOS, accountants and engineers, resigned from municipalities and then became independent consultants in the same municipalities they used to work for.

“So it becomes a revolving door of turn over,” he said.

“There’s no job security in municipalities. After the fiveyear period as the CFO, your contract is finished and you have to re-apply like any other candidate. In this context, future uncertainty sets in.

“At times when a new municipal council comes in, it removes the CFO [because it] wants its ‘own’ CFO it can trust.

“So it is the employment regime or the system in municipalities — the fixed term contract issue.”

Oliphant said each municipality conducted training programmes throughout the calendar year.

“But the critical question is the extent of the effectiveness and efficiency of the training programmes,” he said.

Maluleke slammed the local authorities for their failure to handle even the simplest of financial processes, such as VAT returns, themselves.

Oliphant said a VAT guide for municipalities was available to assist councils with the handling of tax issues.

“For municipalities to equip themselves with tax skills, the provincial treasury and Cogta must train the budget and treasury officers in municipalities on the contents of the document,” he said.

“It is called VAT 419 and it is fairly easy to understand when you know accounting and tax principles.”

Some of the issues raised by the AG were accounting functions, yet the municipalities have accountants and financial managers.

Asked how these officials were hired by the municipalities, Oliphant said: “The answers to the questions can best be answered by each municipality’s BTO [budget and treasury offices], particularly the municipalities that have been flagged by the AG.”

Commenting on findings that unfilled vacancies were among the factors contributing to the overreliance on consultants, Oliphant said municipalities advertised posts in newspapers all the time.

We have rolled out the risk adjusted strategy plan to help municipalities to plan their projects a year ahead