Municipal Managers and CFOs paid bonuses despite negative audit outcomes

According to figures released by the National Treasury, 56 Municipal Managers were paid performance bonuses in the last financial year despite presiding over poor municipal performance. In total, R249 million (including performance bonuses) was paid to Municipal Managers last year.

The Democratic Alliance (DA) believes in rewarding excellence in the public service. But it cannot be right that high-flying Municipal Managers are rewarded with huge bonuses for failing to do their jobs properly.

In our analysis of Treasury statistics, we found that 56 municipalities awarded their municipal managers performance bonuses, even though they received negative audit outcomes for poor financial management. In all but three of these municipalities the Chief Financial Officers (CFOs) were awarded performance bonuses as well.

Of the 283 municipalities in the country, a majority 147 of them received negative audit outcomes. Their audits were either deemed "qualified," "adverse" or the A-G issued a "disclaimer" of opinion. The other 136 received positive audit outcomes, meaning "unqualified" or "unqualified with findings".

Of the 147 municipalities with negative outcomes, 56 paid performance bonuses averaging R98,000 for each Municipal Manager. These non-performing Municipal Managers earned on average a total income of R1 million each. The CFOs of these failing municipalities were paid on average R80,000 in performance bonuses as well. In total, R9,7 million was paid to underperforming Municipal Managers and CFOs in performance bonuses. (See list here.)

The worst offender was Mangaung in the Free State. It received a "disclaimer" of opinion, but the Municipal Manager earned a total salary package of R2,015,024 which included a bonus of a whopping R335,837 - the highest in the country by far. Even the CFO got a R277,418 bonus, despite Mangaung's long history of negative audit results. Worse still, the top 7 executives in the city paid themselves a total of R2,028,174 in bonuses, an average of R289,739 per person. This figure is higher than any other bonus paid to a Municipal Manager in the country.

It's time the ANC starts taking political responsibility for these abuses. It's not enough to hide behind the Constitutional separation of spheres of government. The majority of these councils were elected under the ANC's banner, so the ANC must share responsibility for putting them in order. 

Statement issued by James Lorimer MP, DA Shadow Minister of Co-operative Governance and Traditional Affairs, September 20 2011

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