Govan Mbeki Municipality (GMM) chief financial officer, Marufa Moloto, asked the council to write off assets worth millions either lost or ‘could not be found’. Moloto also asked the council to condone wasteful expenditure of about R65m.
She presented the financial statements at the council meeting at the beginning of the month, where she also revealed that GMM has met the deadline of August 31 to submit its annual financial statement (AFS) for the 2022/23 financial year that ended on June 30 to the Auditor-General (AG) for audit.
The submission of the statements is in accordance with Section 126 (1) of the Municipal Finance Management Act (MFMA) No 56 of 2003.
This states the accounting officer of a municipality must prepare the AFS of the municipality within two months after the end of the financial year and must then submit those statements to the AG for audit.
Moloto said the assets which needed to be written off from the assets register totalled R20m. These assets could either not be found during the preparation of the AFS or have been lost, for which they have submitted insurance claims.
It also includes assets with the lifespan lapsed, and ‘old and irrelevant’ library books. Moloto said the assets to be removed from the assets register included land and property.
“The municipality sold land which needs to be removed from the register because it has passed the ownership to the buyers. This includes RDP houses already transferred to the beneficiaries but still reflect on our assets register,” explained Moloto.
According to her, there is also property sold with the title deeds transferred, but because of the time it took from when the buyers bid on the property to when they paid, it reflects a loss of R10,3m on the financial books.
“Unfortunately, we do not have a given time buyers must pay for land or property. No money has been lost or spent. It is just an accounting principle,” said Moloto.
She said the wasteful expenditure of R65m is due to debt. The council, according to her, needs to understand that it is not money paid out and there is no money that would be paid.
According to Moloto, the calculations were done on an assessment made by looking at individual consumers and their payment patterns.
The municipality’s executive mayor, Nhlakanipho Zuma, praised the finance team for their sterling work in ensuring that they did the submission on time.
He hopes for a better audit outcome, which will mean better financial management that leads to improved service delivery.
ALSO READ: GMM and Lekwa are among South Africa’s 66 dysfunctional municipalities
In previous years, the municipality has on occasion either missed the deadline to submit its financial statements to the AG or did not submit it at all. Opposition parties do not share Zuma’s optimism.
The DA in GMM is calling for the investigation into assets to be written off ‘because the municipality cannot find them’.
“The CFO presented to the council that there are 783 assets valued at more than R3m that could not be found and should therefore be written off.
“Something is not adding up. We suspect that corruption happened and we want an investigation,” said Clr James Masango.
EFF councillor Thabiso Mofokeng, also a member of the Municipal Accounts Committee (Mpac), was surprised to hear the municipality was ready to submit financial statements to the AG for an audit because Mpac has not scrutinised the statements.
“According to the Municipal Finance Management Act, Mpac is supposed to receive all reports, including financial statements, before they present them to the council meeting.
“As the committee responsible for oversight, we were supposed to look at those assets that the CFO wants to be written off and the reasons why,” said Mofokeng.
“This proves that Mpac is non-existent in our municipality. Officials do as they wish and tell the council what to do. They don’t even want to be accountable to the Mpac.
“Some assets they want to be written off, include land. How do you lose land? ” asked Mofokeng.
The Mpumalanga Provincial Treasury held a meeting with the GMM management team on September 11 to introduce a service that will review the Financial Recovery Plan (FRP) for the municipality.
