House Chair, the purpose of the Public Excess Audit Fee Bill is to provide that audit fees in excess of 1% of current and capital expenditure of qualifying auditees audited by the Auditor-General is the direct charge against the National Revenue Fund. National and provincial departments are excluded from this provision. This places a focus on municipalities. The proposed provision serves to encourage laziness and irresponsible spending on the part of municipalities.
What is the incentive for municipalities once this Bill is in place? Across South Africa we have seen municipalities in serious debt, because they have financially mismanaged. Provinces like the North West are known to us. Irregular expenditure in North West municipalities increased from R3, 19 billion to R4, 29 billion in the 2016-17 financial year.
Three municipalities that contributed to 55% of such expenditure were the Rustenburg local municipality with R983, 5 million, in Ngaka Modiri Molema District municipality with R827, 8 million and the Madibeng Local