It comes as no surprise that the municipality received a negative audit and between the lines the words ‘finances are in shambles’ scream out in capital letters.
The Auditor General, tasked to do an overview of the municipality’s financial statements and financial performance, among others, had a hard time as he received little if any help from the municipality’s management team when the audit was done.
“Senior management did not ensure that the municipality has implemented robust internal controls supported by strong capable governance structures to address the significant weaknesses in the control environment that were previously reported,” the Auditor General said.
He drove the last nail into the municipality’s coffin when he observed that the municipality does not have an effective record keeping management process to ensure that information reported in the annual financial statements, annual performance report and compliance with supply chain management are fully supported.
It became clear that the municipality does not adequately monitor the implementation of internal controls that had been designed to ensure complete and accurate information is reported in the annual financial statement and annual performance report.
Did Mr Theo van Vuuren, the city’s administrator and the previous Chief Financial Officer, Mr Ben Dorfling fail? This is the question residents would like an answer to.
Van Vuuren came armed with a three-plan approach to turn the municipality into a self-sustainable entity.
The first was the short term stabilisation and empowerment of the municipality, which has been completed.
The second was a medium term plan that saw interventions through activities and funding in the budget and Integrated Development Plans (IDP) and intervention strategy.
The third was a long term plan to rebuild the infrastructure base and allow for growth in the municipality.
The key in all three plans were to turn the municipality into a booming entity with strong financial pillars.
Looking at the medium term plan, the Auditor General found that the municipality did not evaluate its performance in respect of programmes or functions funded by the allocation of the municipal systems improvement grant.
The long-term plan also reflects a lack of managerial skills.
The annual performance report was not presented for auditing and therefore the Auditor General’s findings were limited.
He looked at solid waste management, the electrical section, water and sanitation services, roads and stormwater and waste water management.
In all five these sections he reported, “The measurability of planned targets and indicators could not be assessed, due to the lack of technical indicator descriptions as well as proper systems and processes.”
To this pot of muddle, expenditure management adds more sour flavours.
The Auditor General found that money owed by the municipality was not always paid within 30 days. Reasonable steps were not taken to prevent unauthorised, irregular as well as fruitless and wasteful expenditure. Procedures for the approval, authorisation, withdrawal and payment of funds and an effective system of expenditure control are not in place. An adequate management, accounting and information system is not in place to recognise expenditure when it is incurred and to account for creditors.
One of the paragraphs that sum up the audit findings tells the public in no uncertain words that the municipality’s financial pillars collapsed.
The Auditor General had the following to say, “Due to the limitations imposed on the scope of the audit by management, I have disclaimed my opinion on the financial statements. But for the legislated requirements to perform the audit of the municipality, I would have withdrawn from the engagement in terms of the International Standards of Auditing.”
Mr Lebo Mofokeng, municipal spokesperson said all the questions raised will be dealt with in the action plan following the audit findings.
