Cogta has called on the municipality to push for clean audit status in the 2023/24 financial year.
This follows the news that KwaDukuza municipality (KDM) received its 18th consecutive unqualified audit last week, but continues to face repeated obstacles.
Addressing council last Thursday, Dr Joey Krishnan from Cogta (Department of Co-operative Governance and Traditional Affairs) said she believed KDM had the ability to solve its own issues.
“We were really hoping to move KDM to a clean audit this year. We really want to focus on addressing the shortcomings,” she said.
“We can have the best plans, but failure to implement them is preventing the municipality from achieving their goals.”
Chairperson of the internal audit committee, Nosipho Mchunu, felt the same way.
“It is time that we undertake not only to investigate findings, but to implement consequence management,” she said.
“KDM will continue to receive repeat findings unless a concerted efforts is made to change.”
The main problems facing the municipality – energy losses, capital underspend and a lack of internal controls to affect consequence management – typically show up year-on-year.
On the occasion of last year’s audit presentation, internal performance audit committee chairperson Christopher Meyiwa said this:
“The issues in KwaDukuza are very easy to crystallise. I can tell you now what will be in next year’s audit – electricity issues, consequence management and capital under-expenditure.”
He was proven right.
Energy losses grew to 25.39%, while the municipality missed targets on new house constructions and bridge upgrades that were scheduled following the previous audit.
Auditor General senior manager Martin Coates said consequence management continued to be an issue, while raising concerns over expenditure and revenue management.
“The debt collection period, creditor payment period and debt vs revenue ratio have all worsened this year,” said Coates.
“KDM is taking 10 days longer to collect debt (from 58 to 68 days), while they are taking approximately 91 days to pay creditors. This compared to 58 days in the previous year.”
He said the municipality was a good going concern with plenty of cash reserves, so payment issues were a symptom of internal control measures.
“We note slow implementation of measures from previous findings,” he said.
Management vacancies within various departments, including civil engineering, finance and internal audit, have all contributed to a loosening of internal control measures.
The internal audit again raised concerns about the difficulties they faced in getting compliance documentation, while also flagging the lack of capacity in their unit.
Krishnan called on the municipality to expedite hiring processes while developing action plans in response to the audit.
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