NDLAMBE Municipality has received yet another qualified audit from the Auditor General (AG) for the financial period, 2016/2017, this despite assurances by the municipal manager Rolly Dumezweni when that financial year began that this would not be the case.
Ndlambe has never received a clean audit from the AG, and the basis for the AG’s qualified opinion for the past year was due to, as the report states, “…irregular expenditure of R368.6-million (in 2016 it was R284.6-million).” He said systems were lacking to allow him to determine the full extent of the understatement of irregular expenditure.
Material electricity losses were reported as totalling R5.6-million (13.25% of total electricity purchased) as well as water losses totalling R12-million (34.4% of total water purchased).
There was unauthorised expenditure of R97.6-million due to overspending of the operational and capital budget at vote level.
However, it is the matters that the AG did not even use for his qualification that seem the most damning for the municipality.
The AG states, “…quotations were accepted from prospective providers who were not on the list of accredited providers and did not meet the listing requirements”. The AG also stated that goods over R200 000 were procured without inviting competitive bids and, more alarmingly, that there was no evidence that the bid evaluation committee did its job in assessing such bids.
Contracts were awarded to bidders who did not receive the highest points in the evaluation process, particularly in the paving of Runeli Drive. In certain cases contracts were awarded to contractors who did not qualify to bid on the work.
Another paragraph in the report states that some municipal employees failed to disclose their interest when close family members were awarded contracts, or when they themselves had business interests in the bidders who received the contracts.
The municipality failed to investigate whether any person was liable for the unauthorised, irregular, and fruitless and wasteful expenditure, and losses resulting from this expenditure were not recovered from any liable person – all contraventions of the MFMA and municipal and budget reporting regulations.
“The leadership did not adequately oversee the implementation and monitoring of internal controls to ensure sound financial and performance management and compliance with legislation,” the AG said.
The AG also reminded the municipality that it did not implement an effective performance management system that holds staff accountable.
For more detail, see this week’s Talk of the Town.