The iLembe District Municipality has received an unqualified audit for the 2020/2021 financial year, but continues to struggle with major water losses.
This amid further flagged issues with regards to consequence management, irregular spending and the lack of ability for the internal audit committee to fulfill their oversight role.
iLembe Municipality is the umbrella municipality under which local municipalities KwaDukuza, Mandeni, Ndwedwe and Maphumulo operate.
With regards to the financial dealings of iLembe, an external audit is undertaken by the Auditor General’s (AG) office, while an internal committee executes a concurrent examination.
From a daily operations perspective, the main role of iLembe is to provide bulk water and sanitation services to all areas within the municipality not covered by the Siza Water concession area.
As part of the AG’s findings, it was discovered that R111.71-million in material water losses were incurred by iLembe, which equates to 48.87% of all bulk water purchases.
This is down from R123.47-million (59.75%) in 2019/2020.
Illegal connections, main leaks owing to ageing infrastructure, reservoir overflows and service connection leaks were the main causes of the significant losses.
Beyond the water issues plaguing iLembe, several internal control deficiencies were again highlighted in the AG report.
Irregular spending caused by a lack of proper tender processes on expiring contracts, reached R38.4-million, this aside from the R101.4-million in irregular expenditure from previous years that remains under investigation by the municipality.
As in KwaDukuza’s audit report, the issue of consequence management was again flagged, raising questions on the ability of both the district and local municipalities to enforce corrective measures where wrongdoing has been identified.
“Appropriate action was not taken against officials of the municipality where investigations proved financial misconduct, as required by section 171(4)(b) of the Municipal Finance Management Act and municipal regulations regarding financial misconduct procedures and criminal proceedings,” read the report.
The internal audit report, which was produced concurrently, identified limited tools of trade which hamstrung the committee’s ability to function effectively.
“Internal audit software to enable the internal audit unit to perform its duties efficiently and effectively has not been provided, and this has a negative effect on operations,” the internal audit report stated.
More generally, improvements were noted in the annual report with regards to budget spending.
iLembe spent 100% of capital expenditure and grant allocations, improving on 70% and 89% respectively from 2019/2020.
This took the municipality’s overall performance rating to 76%.
“iLembe has maintained its status as functional in its implementation of the Back2Basics approach (which was a presidential directive for municipalities in 2014). This indicates good political stability, governance, service delivery, financial management, institutional management and community satisfaction in the district,” said previous district mayor, Sduduzo Gumede.
The draft annual report can be obtained from the iLembe House at 59/61 Mahatma Gandhi Street, KwaDukuza.
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