First Certificate of Debt Issued by Auditor-General Over Water Tankering Scandal

18 Nov

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For the first time since the Public Audit Act (PAA) was strengthened in 2019, the Auditor-General (AG) Tsakani Maluleke has issued a Certificate of Debt (CoD). This means a senior municipal official, the accounting officer of Ngaka Modiri Molema District Municipality in North West, must personally repay R4.6 million due to mismanagement and financial loss.

What went wrong?

Back in June 2018, the municipality hired a company to deliver water tankers to drought-hit communities. Sounds reasonable, right? The contract lasted two years and was extended twice, eventually ending in December 2020. During an audit, the AG’s team found that the service provider overclaimed on kilometres and hours worked, meaning they charged for more than they actually did.

This was picked up the issue during the 2018–2019 audit, but the same overcharging continued into 2020. As a result, the municipality lost millions of rands in public funds.

Ignored warnings = serious consequences

When the AG discovered the problem, she flagged it as a Material Irregularity (MI): a serious issue that leads to financial loss or misuse of public funds. Here’s what happened next:

The municipality was given time to fix the problem and recover the money.
The accounting officer made some promises but didn’t follow through.
Even after the AG issued a remedial directive (a formal instruction to take action), the official still did nothing.
After multiple warnings (which were again ignored) and giving him a chance to respond, the AG decided to issue the CoD, making the official personally liable for R4.6 million.

What about the mayor?

The AG also reminded the executive mayor that he’s responsible for collecting the money from the official. If he fails to act, the AG can escalate the matter to Parliament.

What is a “Material Irregularity”?

A Material Irregularity (MI) is when:

A law is broken,
Public money is misused, or
An official fails to act, and it causes serious financial damage.

The law was updated in 2019 to give the AG more power, not just to report on problems, but to actually make officials fix them, or hold them personally responsible.