The report of the Auditor-General (AG) has once again slammed Msukaligwa Municipality’s financial housekeeping as at 30 June 2013.
The report attributes the “disclaimer of opinion” to several reasons.
The municipality could not provide sufficient appropriate audit evidence to support prior period adjustments amounting to R1 246 993 173 processed through the accumulated surplus account; additions to infrastructure assets amounting to R6 939 819; as well as work in-progress amounting to R57 730 966 as at June 2013.
The AG was unable to determine whether any adjustments relating to property, plant and equipment amounting to R1 690 544 019 were necessary.
Irregular expenditure amounting to R4 644 111 disclosed in financial statements is understated by R33 692 198.
Unrecognised contractual commitments amounting to R32 603 448 were not included in the accounting records of the municipality or in the financial statements.
The AG found that the financial statements as a whole are materially misstated. Expenditure is misstated by more than R2-million; receivables from exchange transactions by more than R6-million; and employee cost by more than R2-million.
Because of these shortcomings, the AG could not express and opinion on the financial statements.
Regarding compliance with laws and regulations, the AG found that monthly budget statements were not submitted to the mayor and the relevant provincial treasury as required by Section 71(1) of the Municipal Finance Management Act (MFMA).
Furthermore, the AG established that the procurement and contract management was not in order.
· Goods and services with a transaction value below R200 000 were procured without obtaining the required price quotations as required by the Supply Chain Management (SCM)
· Contracts and quotations were awarded to bidders who had not submitted a declaration on whether they were employed by the State or connected to any person employed by the State as required by the SCM Regulation 13(c)
· Awards were made to providers who were in the service of other State institutions or whose directors or principal shareholders were in the service of other State institutions.
· The prospective provider’s list for procuring goods and services through quotations was not updated at least quarterly to include new suppliers that qualify for listing as per requirement by the SCM regulation 14(2)
· Bids specifications for the procurement of goods and services through competitive bids were drafted in a biased manner that did not allow potential suppliers to offer their goods and services.
An investigation is being conducted to probe employees who allegedly stole cash from the sale of electricity, an employee who unlawfully filled his car with the municipality’s petrol, and employees who allegedly signed lease agreements for flats owned by the municipality.
