Quotations were accepted from bidders who did not submit a declaration on whether they are employed by the state or connected to any person employed by the state
THE CASH-strapped Sol Plaatje Municipality incurred electricity losses of R117.5 million in the 2018/19 financial year, while water losses amounted to R58.4 million – more than 60% of the total water purchased.
This is according to a damning report from the auditor-general, who slapped the municipality with a qualified audit opinion for the last financial year.
During this period the local authority did not have a permanent chief financial officer or municipal manager and various senior officials were appointed to act in these positions.
According to the auditor-general’s report, reasonable steps were not taken to prevent irregular expenditure by the municipality.
Presenting the audit report at yesterday’s special city council meeting, the senior manager at the Office of the Auditor-General, Ndabezinhle Nkosi, stated that irregular expenditure had grown from R2 million three years ago to R15 million and was now in the order of around R20 million.
“The expenditure disclosed does not reflect the full extent of the irregular expenditure incurred as indicated. The majority of the disclosed irregular expenditure was caused by non-compliance with SCM (Supply Chain Management) Regulations. Irregular expenditure amounting to R26 million was incurred on phase 1 and 2 for electrification in indigent areas.”
The audit found further that some of the goods and services with a transaction value of below R200 000 were procured without obtaining the required price quotations, in contravention of SCM Regulations.
Quotations were accepted from bidders who did not submit a declaration on whether they are employed by the state or connected to any person employed by the state.
Goods and services above
R200 000 were procured without inviting competitive bids, invitations for competitive bidding were not advertised for the required minimum period of days, some of the contracts were awarded to bidders that did not score the highest points in the evaluation process, sufficient audit evidence could not be obtained that all extensions or modifications to contracts were properly approved and the performance of contractors was not monitored on a monthly basis.
“Irregular expenditure incurred by the municipality was not investigated to determine if any person is liable for the expenditure and allegations of financial mismanagement against senior managers were not always investigated.”
The auditor-general found further that material provision for impairment of R959 million was provided for as a result of poor collection trends, while a loss of
R56 million was incurred as a result of the writing-off of irrecoverable debtors.
Nkosi pointed out yesterday that over the past five years, the audit opinion in the first three years was unqualified with findings but had regressed to qualified for the last two years.
Commenting on the report, the executive mayor, Patrick Mabilo, said he was disappointed with the findings of the report.
“It means we are lacking and it is incumbent on myself, the mayoral committee and the acting municipal manager to move towards a better outcome. We need to deal with the root cause and the fact that council has failed to adopt an oversight report. We have lost focus.”
He was echoed by many councillors, including Chris Phiri from the DA, who questioned what legacy the council was going to leave behind next near. “Are we taking our oversight role seriously or have we failed as a council?”
He pointed out that many of the issues raised involved the supply chain management process, adding that some of these had criminal intent.
Chris Liebenberg from Cope raised the issue of consequence management, pointing out that in December 2018 there was an incident where R2.6 million was allegedly deposited into the account of a senior manager. “What actions have been taken in this regard?” he asked.
It was also pointed out in the meeting that there were stubborn officials at the municipality. “Employees who don’t want to work must be fired and we must get new people. We can’t have water losses of such amounts.”