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Crumbling municipal entities lack oversight, transparency and action

- William Gumede

It is no surprise that poorly run municipalities are often home to failing endeavours rife with mismanagement.

Municipal-owned entities in SA are overseen by an extensive array of governance legislation, regulations and codes, yet are often engulfed in corruption, mismanagement and inefficiencies.

So dysfunctional are many of the cities’ municipal-owned entities that late last year, Johannesburg’s new DA mayor, Herman Mashaba, threatened to close the lot of them in exasperation and incorporate their staff into the public service.

The irony is that the rationale for a municipal-owned entity is for it to be an alternative way of delivering public services that is supposedly more efficient and more profitable than traditional public services.

Municipal-owned entities are essentially ring-fenced businesses that have a mandate to deliver a public service, can operate independently from the municipality and ideally, would have less bureaucratic constraints in order to improve performance using private sector delivery models.

In the General Report on Audit Outcomes for Local Government for the years 2009 to 2015 the auditor-general lists noncompliance with laws and regulations, lack of internal controls, supply chain management transgressions, unauthorised, irregular, fruitless and wasteful expenditure and corruption as some of the key failures of municipal-owned entities... [Read the full article.]

This article first appeared in the Business Day. William Gumede is an Associate Professor in the Wits School of Governance.