Municipality paid consultants R34m to file tax returns – AG
Auditor-general Tsakani Maluleke has detailed how a municipality paid consultants a whopping R34 millionto file its tax and VAT returns.
The money was spent despite the municipality having an appointed CFO to work on its financial statements.
Maluleke made the revelation on Wednesday when she delivered the 2020/21 local government audit outcomes in Pretoria.
“There is a municipality that paid R34 million to a consultant because they agreed with this consultant that they would give them a percentage of what comes back from SARS,” Maluleke said.
“So, you have a CFO appointed doing the VAT returns if you are doing the basics every day and every month. That is not complex for a CFO, it’s not. Why would someone go and find a consultant to pay them this lucrative amount for the sole purpose of doing what they should be doing?”
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Maluleke said municipalities spent a whopping R1.26 billion in consultants.
She says that this amount has doubled compared to what was spent by the previous administration.
“Financial reporting consultants cost local governments R5.31 billion over the term of the previous administration and 70% of municipalities used consultants for every year of the term.”
Out of 257 audited municipalities, 41 received a clean audit while 100 had unqualified findings.
This means that close to 50% of the country's municipalities have either qualified, adverse, and disclaimed findings, with at least nine having outstanding audit outcomes.
