Fifth consecutive qualified audit opinion for Polokwane Muni
The Auditor-General's (AG) report for the 2020/2021 financial year that was recently released, delivered a qualified audit opinion for the Polokwane Municipality for the fifth consecutive year.
POLOKWANE – The municipality’s records indicate that the last unqualified report was during the 2015/16 year and that the past 12 years have yielded two disclaimer reports, eight qualified opinions and only two unqualified reports.
Financial management is at the heart of the AG report and paints a dark picture of irregular expenditure, amounting to R72.9m of which the majority was caused by contravention of Supply Chain Management regulations as well as unauthorised expenditure amounting to R614.2m, mostly caused by overspending of the budget. A worrying fact is that no steps were taken to investigate the expenditure, resulting in no steps being taken for those responsible.
An impairment of trade debtors of R141.2m was incurred as a result of debt which is according to the AG, doubtful for recovery. Some contracts were extended or modified without the approval of a properly delegated official, performance of some contractors was not sufficiently monitored on a monthly basis and contract performance and monitoring measures were not in place to ensure effective contract management.
The AG criticised how processes were followed, stating that the accounting officer did not adequately review the financial statements prior to submission for audit, as misstatements in the consolidated and separate financial statements were not detected by the municipality’s own system of internal controls.
“The municipality did not have sufficient monitoring controls to ensure proper implementation of the overall processes of compliance with legislation. Non-compliance with legislation could have been prevented had compliance been reviewed and monitored,” the AG remarked and concluded that some uncorrected material misstatements and supporting documents that could not be provided, resulted in the financial statements receiving a qualified audit opinion.
DA caucus leader in the municipality, Jacques Joubert said in a media release that what lies at the heart of all the yearly inadequacies of the administration, is a lack of proper supervision, internal controls and consequence management.
“The DA reiterates that without sufficient supervision and management, as well as proper consequence management, Polokwane Municipality is bound to keep repeating the mistakes of the past term. It is not acceptable that for the residents of Polokwane such poor management unavoidably means less services at escalated prices,” Joubert said.
