Merafong’s finances in shambles

This means the municipality failed to provide the necessary documents for the AG to form an audit opinion on the municipality’s financial affairs.
According to the AG, a disclaimer of opinion is the worst of the five outcomes of a municipality’s financial audit. The other four outcomes, from best to worst, are a clean audit, a financially-unqualified audit opinion, a qualified audit opinion and an adverse audit opinion.
Merafong received unqualfied audits from 2009/10 to the 2019/20 municipal financial years. It received a qualified audit in the 2020/21 year.
The current AG report for the 2021/22 municipal financial year was discussed in the council last week.
Among other things, the municipality did not provide the necessary information for the AG to give an opinion on its assets, investments, exchange transactions, employee benefits obligations, contracted services, operational cost, debt impairment provision, operating and distribution losses and commitments.
According to the AG, it also failed to correctly prepare and disclose the net cash flows from operating and investment activities and the statement of comparison of budget and actual amounts.
“Several conditions exist that might influence the municipality’s ability to continue as a going concern,” the AG noted.
The municipality had also stated 0 per cent achievements on some projects. Among other things, the AG also noted that Merafong did not always pay the money it owed within 30 days and that reasonable steps were not taken to prevent irregular expenditure.
It also did not have an asset register in place.
Among other things, the AG also flagged various issues with the municipality’s procurement management.
These included insufficient audit evidence that all contracts and quotations were awarded as per legislative requirements, that the municipality had obtained some goods and services below R200,000 without getting quotations and that some quotations were accepted from bidders who had not declared their tax matters or whose tax matters had not been cleared by SARS.
Some contracts were also awarded to bidders based on points that differed from those stipulated in the original bidding.
When the Herald asked the municipality about the matter, the current acting municipal manager, Mr Lesedi Mere, said Merafong had since improved on some of the issues mentioned in the report.
Many of the problems were also related to several residents not paying for services.
He promised to give a comprehensive response next week.