Auditor-General Tsakani Maluleke Issues First Certificate of Debt, Holding Municipal Manager Personally Liable for R4.6 Million Overpayment
Mahikeng – Auditor-General Tsakani Maluleke has made history by issuing her office’s first Certificate of Debt (COD), holding a municipal manager personally accountable for millions in financial losses due to overpayments. The COD targets Allan Losaba, the accounting officer and municipal manager of the Ngaka Modiri Molema District Municipality in the North West, making him liable for R4.6 million stemming from irregular water tankering services during the 2018-19 audit cycle.
Maluleke described this as a milestone in strengthening consequence management for stewards of public finances, using expanded powers granted in 2019 to ensure those responsible for mismanagement face real penalties. This action comes amid widespread concerns over municipal financial irregularities, where billions are lost yearly to poor governance, highlighting the need for stricter accountability to protect taxpayer money and improve service delivery in struggling local governments.
The First COD: A Milestone in Accountability
Maluleke’s decision marks the inaugural use of the COD mechanism under amendments to the Public Audit Act in 2019, which empower her office to hold accounting officers personally liable for material irregularities (MIs) that cause financial harm. In this case, the overpayment occurred for water tankering services, where the municipality paid a service provider far more than justified, resulting in losses that could have funded essential community needs. The AG’s office identified the issue during the 2018-19 audit and issued an MI, but no remedial steps were taken, leading to the escalation.
The COD requires the municipality’s mayor to recover the amount from Losaba. If the mayor fails to do so, the matter escalates to the provincial legislature for further action. Maluleke emphasised that CODs are a last resort after all other efforts to resolve MIs fail. “We’ve always seen issuing a certificate of debt as a last resort when everything else has failed, when there’s no responsiveness,” she explained. This tool aims to deter future mismanagement by making officials personally responsible, potentially through salary deductions or asset seizures if unpaid.
Losaba, who has served as municipal manager since 2019 and earns around R1.8 million annually, did not immediately respond to queries about the COD. The municipality includes the town of Mahikeng and has faced ongoing financial woes, with clean audits elusive due to issues like poor procurement and oversight.
The Overpayment Case: Water Tankering Services Under Scrutiny
The R4.6 million loss arose from overpayments to a service provider appointed in mid-2018 for water tankering amid shortages in the district. The AG’s office found the municipality had overclaimed on kilometres and hours for these services, leading to inflated bills that went unchecked. Despite binding recommendations in the audit report, no recovery actions were taken, prompting the COD.
An independent advisory committee, set up to review such cases, looked over the matter and advised Maluleke to proceed. This panel ensures fairness and includes experts in law, accounting, and public administration. Maluleke noted the process is rigorous: “As one of the last steps, an independent advisory committee – specifically set up to review the certificate – looked over the matter and advised her to proceed.”
This case is part of a broader pattern in South African municipalities, where overpayments and irregular expenditure total over R50 billion annually, according to recent AG reports. Water services are particularly vulnerable, with ageing infrastructure and poor management leading to frequent outsourcing that opens doors to fraud.
Expanded Powers: A Tool for Consequence Management
The 2019 Public Audit Act updates gave the AG more teeth to tackle financial misconduct, shifting from just reporting issues to enforcing remedies. Before CODs, MIs often went unaddressed, allowing losses to pile up. Now, if officials ignore audit findings, the AG can bind them to act or hold them liable.
Maluleke said her office expects regular updates from the municipality, with the first due by December 2025. If no progress is made, further steps like court enforcement could follow. This power stems from years of concern over the lack of consequences for mismanaging public funds, which has contributed to service delivery failures across the country.
Losaba’s Role and Municipal Challenges
As accounting officer, Losaba is responsible for financial controls and compliance. The AG’s report criticised the lack of action on the MI, saying it showed a failure in leadership. The municipality has struggled with unqualified audits for years, with issues like weak internal checks leading to repeated findings.
Ngaka Modiri Molema serves over 800,000 people in rural and urban areas, where water shortages are common due to droughts and old pipes. The overpayment case worsened these problems, as funds meant for fixes were lost. Residents have protested water issues, calling for better management to avoid reliance on costly tankers.
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