Merafong Municipality receives disclaimed audit opinion for second consecutive year

The Auditor-General (AG) gave the Merafong City Local Municipality a disclaimed audit opinion for the second year in a row.

The AG, Tsakani Maluleke, recently reported her structure’s findings for the last financial year that ended in June 2023.

It also includes extra information that had been finalised by March 31 of this year.

Although an overview of the report was released toward the end of August, more detailed information about specific municipalities were only released recently.

Merafong is the only municipality in Gauteng that received a disclaimer due to failure of handing over enough documentation for an audit opinion.

The AG noted that both Merafong’s performance reports submitted for auditing, as well as the quality of these performance reports were poor.

Among other things, the municipality has uncompetitive and unfair procurement, awards contracts to employees or councillors or other state officials, and has inadequate contract management.

It also had fruitless and wasteful expenditure to the amount of R307m, which was much more than the R168,5m of the previous financial year. The municipality also showed irregular expenditure of R475,8m, which is more than double the R195,4m of the previous year.

Although Merafong received infrastructure grants, it underspent the money by over 10%.

The municipality also disclosed R154,1m in water losses in annual financial statements, which is the equivalent to 34% of all water flowing through municipal pipelines.
The National Treasury norm for such losses is 15 to 30%.

According to Merafong’s annual financial statements the council spent no money on repairing and maintaining infrastructure assets.

The AG also issued five notifications about material irregularities at the municipality.