By Chantelle Benjamin

Management of municipal finances has deteriorated in the past three years, despite efforts to help municipalities, according to Gauteng legislature’s standing committee on public accounts.

Government’s national effort to rescue 284 ailing municipalities with everything from financial management to the supply of basic services came in the form of Project Consolidate in 2004.

According to a report in Business Day, Mike Seloane the committee chairman, says the benefits of the project will probably not be felt for another two years.

“We have seen a trend of deterioration in terms of financial management of municipalities since 2001, which is a matter of concern to the committee.

“However, the financial statement for 2004-2005, to be released by the auditor-general in June, was compiled under the new act and is expected to be a good indicator of the extent of problems municipalities face,” Seloane is reported as saying.

Under the new act, Government has tightened financial management of local authorities, requiring monthly reports to serve as an early indicator of accounting problems.

Seloane says lack of capacity has been a problem across the board but this did not explain the poor performance.

Qualified audits were given to Ekurhuleni, Tshwane and Merafong. The only municipalities to receive unqualified audits were Lesedi, West Rand and Mogale City, which had previously approved audits.

Source: Business Day