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Sol puts damning report on ice

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At a council meeting last week, where the Audit Committee report was presented, it was pointed out that there was no point in discussing this report without discussing the Section 106 report as the two go hand in hand.

The Section 106 investigation report.

A SPECIAL Sol Plaatje City Council meeting, to discuss a damning Audit Committee report, as well as the Section 106 investigation report, has been postponed.

At a council meeting last week, where the Audit Committee report was presented, it was pointed out that there was no point in discussing this report without discussing the Section 106 report as the two go hand in hand.

The two items were due to be discussed at a special council meeting today but councillors were informed yesterday that today’s meeting had been postponed.

Also on the agenda for today’s meeting was the cancellation of council meetings.

The Audit Committee report is based on the items the committee considers serious and would like to highlight to the council.

The report highlights the leadership stability at Sol Plaatje Municipality following the suspension of the municipal manager and the chief financial officer, who were suspended in July 2018.

“There is currently no indication of the way forward regarding their suspension and the stabilisation of two of the key executive positions. The MEC for Local Government appointed the investigating team in terms of Section 106 of the Municipal Systems Act, the investigation was finalised in October 2018 and the report was tabled to council on October 25, 2018. The feedback received indicates that the report has since been treated as confidential and has therefore not been discussed by council,” the Audit Committee report points out.

It continues further that there has been a deterioration in the financial results and performance for the 2017/18 financial year and that a key staff member in the finance department resigned subsequent to the 2017/18 financial year-end.

“The collection of short-term cash flows is the most significant challenge facing the municipality. Management has continuously highlighted that the only solution to this challenge is the effective implementation of the debt recovery policy.”

Another issue raised is that the 2016/17 and mid-year of 2017/18 staff performance assessments have not taken place. “The final assessments for 2017/18 is planned for March 2019. Management has provided no indication as to when the first assessment for the 2018/19 financial year is planned for.”

The report points out further that authorisation regarding the sale of leave was not properly authorised and there were ineffective system controls on pay days. There is also no formal procedure in place for leave encashment.

Regarding the municipality’s housing policy, the Audit Committee pointed out that there was no proof of stamped application receipts for applicants who applied for BNG housing, while critical fields are not available or updated in the housing database system. Title deeds are not transferred to legal owners of BNG houses and the conditions of BNG houses are poor after a year or two of occupation.

Housing rentals are equally critical with no proof that the deeds search was done to ensure that rental units are not allocated to property owners. Several findings were also highlighted by the external auditor, including the completeness of investment properties and assets, while the completeness of units sold on water losses could also not be confirmed.

Limitations were also highlighted on the creation of 300 jobs through EPWP initiatives and the municipality was also found to not have a maintenance plan in place.

In terms of the supply chain management process, the audit found that the declaration of partnership not disclosed by supplier and employee, non-compliance was identified and three quotations were not obtained.

The AC had also held a risk workshop with the management of Sol Plaatje Municipality in August 2018, where the key strategic risks were looked at.

Among the top five was the increased Debtors Book and increasing Indigent Register and the declining financial sustainability of the municipality, the sustainability of revenue generation due to reduced demand for electricity and increased tariffs as well as the projected revenue shortfall due to public protest and actions that resulted in putting the basic charges in abeyance.

Loss of revenue due to water losses was among the top risks, as well as the current administrative instability which has seen an acting municipal manager, an acting CFO and acting senior managers in Finance.

Other issues raised included inadequate (failing) water and sanitation infrastructure; the condition of water and sanitation infrastructure (conveyance and reticulation); high level of non-revenue water (water losses); deteriorating raw water quality; rising tariffs; information technology risk; and audit outcome.

Other items that were on the agenda for discussion at today’s meeting included long-standing debts owed by councillors and officials and the cancellation of council meetings.