The auditor-general pointed a finger at the leadership of the municipality, pointing out that it did not exercise its oversight responsibility to ensure that proper internal control procedures were developed and implemented...
THE SOL Plaatje Municipality has regressed, receiving a qualified opinion from the Office of the Auditor-General for 2017/18.
Presenting the audit report at yesterday’s special City Council meeting, the senior manager at the Office of the Auditor-General, Ndabezinhle Nkosi, said that there were a number of reasons for the qualified opinion, including the fact that the municipality did not maintain adequate records of all land and buildings under its control, as well as its investment property. This resulted in the Auditor-General not being able to determine the full extent of the understatement of investment property for the current and previous year.
The municipality also failed to maintain adequate and complete records of services rendered.
Adequate records of the number of water units distributed were also not properly maintained so it was not possible to determine the extent of the overstatement of water losses.
Nkosi explained further that two development priorities of the municipality were selected for evaluation, namely basic and sustainable service delivery and infrastructure development and local economic development.
In terms of service delivery, the KPA of the municipality was to ensure that adequate maintenance (at least 90% completion in terms of the plan) was done on sporting and recreational facilities.
Here the auditor-general said he was unable to obtain sufficient appropriate audit evidence for the reported achievement of 90%.
The target of decreasing water losses to 45% by June 30 2018, with an achievement of 53% as reported by the municipality, could also not be confirmed due to the municipality not maintaining adequate records of the number of water units distributed under water losses.
In terms of local economic development a target was set of creating 300 FTE jobs through EPWP initiatives. According to the audit report, the supporting evidence did not agree with the reported achievement of 407 jobs and indicated an achievement of 663 jobs.
With regard to compliance with legislation, the audit report stated that reasonable steps were not taken to prevent irregular expenditure, adding that the majority of the disclosed irregular expenditure was caused by non-compliance with supply chain management regulations.
Irregular expenditure of R2.633 million was incurred on the refurbishment of the sewer outfall on the Galeshewe-Gogga Pump project. It was stated further that the value of R15.874 million stated as irregular expenditure was not complete as management was still in the process of quantifying the full extent of the irregular expenditure.
In terms of procurement and contract management, some goods and services with a transaction value of below R200 000 were procured without obtaining the required price quotations, while some with a transaction value of above R200 000 were procured without inviting competitive bids. The auditor-general pointed out that deviations were approved by the accounting officer even though it was not impractical to invite competitive bids.
Persons in service of the municipality whose close family members had a private or business interest in contracts awarded by the municipality failed to disclose such interest.
The auditor-general pointed a finger at the leadership of the municipality, pointing out that it did not exercise its oversight responsibility to ensure that proper internal control procedures were developed and implemented to enable the municipality to produce an accurate and complete set of annual financial statements. There was also no follow up on instances of non-compliance throughout the year.
“The annual financial statements and annual performance report were subjected to material amendments that can be attributed to weaknesses in the implementation of controls. In addition, the collation of different information from various units for incorporation into the financial statements and annual performance report was not done in time to allow for sufficient and adequate reviews.