In an unprecedented move that signals a new era of financial accountability for public officials, Auditor-General (AG) Tsakani Maluleke has issued the first-ever certificate of debt against a sitting municipal manager, holding him personally responsible for a R4.6 million loss incurred through an irregular and inflated contract.
The landmark action, taken against Ngaka Modiri Molema District Municipality manager Allan Losaba, stems from a 2018 emergency water tanker contract awarded during a severe drought in the North West province. This represents the first use of the AG’s powerful extended powers under the amended Public Audit Act (PAA), which came into effect in April 2019 and empowers the office to directly recoup losses from negligent officials.
The Case: Inflated Contracts During a Crisis
The AG’s investigation found that during a period of critical water scarcity, the municipality awarded a contract for water tankering services at a price significantly inflated above market-related rates. The audit revealed that Losaba, as the accounting officer, failed in his fiduciary duty to ensure the contract followed a fair and competitive process, resulting in an overpayment of R4.6 million of public funds.
“The evidence showed a clear failure to exercise the required care, skill, and diligence in the management of municipal resources,” a statement from the AG’s office read. “The official disregarded key supply chain management regulations, leading to an irregular and fruitless expenditure that could have been avoided.”
A Powerful New Tool for Clean Governance
Until now, the AG’s reports have often highlighted such irregularities, but the enforcement of consequences has been a protracted process reliant on other state organs. The amended PAA, specifically section 5(2)(c), allows the AG to bypass this by issuing a certificate of debt directly to the responsible individual if they fail to implement the remedial actions prescribed in an audit report.
This certificate has the legal force of a civil judgment. If Losaba does not pay the amount, the AG can approach a court to enforce it, which could lead to the seizure of his personal assets.
“This is a watershed moment for public finance management in South Africa,” said a governance expert from the Public Affairs Research Institute. “For the first time, the Auditor-General is not just an auditor but an active enforcer of accountability. It sends a clear message to all accounting officers: you will be held personally liable for reckless or corrupt spending.”
Implications and the Road Ahead
The move has been hailed by civil society organisations as a potential game-changer in the fight against municipal maladministration and corruption, which has crippled service delivery across the country.
For Allan Losaba, the consequences are immediate and severe. He is now personally liable for the R4.6 million, a debt that will be pursued through legal means. The Ngaka Modiri Molema District Municipality is also expected to take disciplinary action.
The issuance of this first certificate of debt is being closely watched by municipalities nationwide. It establishes a powerful precedent, signaling that the era of impunity for those who mismanage public funds may finally be coming to an end. The AG’s office has indicated that this is likely the first of many such certificates to be issued as it intensifies its use of these new powers to safeguard public resources.
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