The KwaDukuza Municipality (KDM) has received its 16th consecutive unqualified audit despite repeated issues with irregular spending and consequence management.
The report for the 2020/2021 financial year ending in June, compiled by the KwaZulu-Natal Auditor-General’s office, was delivered to council last week.
A concurrent internal municipal audit was also presented.
Both audits noted that no material issues were found in the representation of KDM’s financial statements, the reason for the unqualified audit.
But it was by no means a clean audit.
Repeated queries have been raised on 4 issues, consequence management chief among them, but also including spending, procurement and asset management.
“We note with concern that some of these issues have been repeated from the 2019/2020 financial year, indicating they have not been effectively dealt with,” said chair of the internal audit committee, Nosipho Mchunu.
As in the previous year, concerns were flagged on irregular expenditure, which totaled R68.75-million in 2020/2021, down from R155.53 million in 2019/2020.
A further R17-million was identified as unauthorised expenditure.
Similarly, unfair procurement processes were again noted.
“Goods and services with a value of more than R200 000 were accepted without seeking a competing bid as is legally required by supply chain management processes. This was noted in the previous 2 audits as well,” said AG representative, Martin Coates.
The lack of an effective system of internal asset control, as required by Section 63 of the Municipal Finance Management Act (MFMA), was also flagged.
This despite the consistent warnings in reports that effective consequence management had not been implemented.
“Although some of these issues have been investigated, there was very little evidence that disciplinary action was implemented. This points to a problem in the effectiveness of the municipal public accounts committee,” said Coates.
An example of the lack of consequence management was raised by Mchunu when discussing the process of compiling the internal audit.
“We are already dealing with a lack of capacity in the internal audit department, but added to this are the delays in responses and submissions we have requested from senior management. Performance and audits are not prioritised by some departments, which impact the effectiveness of the report. Council must investigate issues of non-compliance,” she said.
There was bipartisan outcry from the assembled councillors who called on these issues to be addressed before the next audit begins in April.
“It concerns me that the internal audit committee lacks the resources to carry out its task. If these issues keep coming up every year, what is really happening?” asked Economic Freedom Fighters councillor, Ayanda Mhlongo.
Municipal manager Nhlanhla Mdakane referred to a consequence management and compliance procedure adopted by council since the last audit was completed.
“We are in the process of following this procedure and developing it further to make sure it is effective going forward,” said Mdakane.
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