The Auditor General, who gave the municipality a negative audit said in his report 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 have been designed to ensure complete and accurate information, as was reported in the annual financial statement and annual performance report.
Mr Theo van Vuuren, the administrator said the audit outcomes and underlying causes must be viewed separately from the overall service delivery and financial recovery plans and interventions.
“An audit measures and verifies certain issues and shows especially, as in the case of Emalahleni that in respect of record keeping a huge problem still exists. It also talks about systems not being in place and many of the findings are as a result of specific people failing to diligently perform these actions,” he dissected the situation.
He said the total turn around of the municipality still rests on the intervention strategy.
Some elements of that strategy dealing with findings from the Audit process are impacted by the same underlying causes or have been shown now to be not effective. These will now be updated and realigned.
In respect of the main audit findings a further Audit Remedial plan, putting targets and responsibilities in place to address the issues raised, has already been prepared, discussed with the Provincial Government and notified to the municipal council.
An internal audit steering committee, led by the Deputy Administrator, Mr Eric Nkumane, on a weekly basis review progress with addressing the issues identified.
“I am pleased that over the past three weeks good progress in this respect has been made. Similarly, a technical team addressing the issues and strategies to overcome the outstanding Eskom debt as well as strengthening the balance sheet to move to financial sustainability, have been working uninterruptedly and are now starting to implement some of these measures. These are similar as contained in the overall intervention strategy but are expanding, diversifying and strengthening especially matters on electricity, water, accounts as well as how to recover the R1.4 billion outstanding debt,” Van Vuuren said.
According to him the process of strengthening capacity in core areas of supply chain and creditor management, revenue enhancement and governance, also are now complete and from next month onwards these functions will be better resourced and this should lead to better results.
“The previously reported remedial actions with those who contributed towards the audit outcomes by not fully executing their responsibilities have largely been completed and I am pleased to observe that this is having positive results.
It gives me much more confidence that with the addition of the deputy administrator and appointment of the acting chief financial officer, we now for the first time have a core team which are capacitated to attend to these issues continuously. As Administrator, mainly facing the daily service delivery challenges, the strategic planning and relationships and mobilising funding for infrastructure, it was impossible to give full attention to all elements required to turn the municipality around sufficiently.”
A member of the intervention team, Mr Nora Mthembu, has been appointed as acting chief financial officer after the chief financial officer, Mr Ben Dorfling left the municipality on January 31.
An official statement by the municipality after Dorling’s departure read, “The Chief Financial Officer has progressively experienced health problems and as a result his availability to address his core responsibilities became problematic. This situation of prolonged absences from office negatively affected key managerial responsibilities especially during the period in which the audit was finalised. Given this, the poor audit results and slow pace of the turn around on matters such as the Eskom account, made it obvious that this situation is not assisting and need urgently to be addressed. In this the provincial government was consulted. There was no order from the provincial government but agreement that the managerial aspects dealing with the municipal finances be reviewed and strengthened.
