Incomplete projects, no consequence management, and bills piling up are just some of the results in the report the office of the Auditor General (AG) delivered in the Mangaung Metropolitan Municipality (MMM) council meeting on Monday, 29 February.
The metro, again, received a qualified audit outcome with findings.
Sue-Ellen Steenbok, of the AG’s office, delivered the report and noted a huge number of problems in the management of the metro.
She said she is thankful for the appointment of a city manager and department heads to hopefully curb the volatile financial position of the administration.
Steenbok said around 33% of the municipality’s current liabilities will have to be funded by next year’s budget.
“A large amount of debt is irrecoverable.”
She said electricity losses stood at 10% and water losses at 49%. Fruitless and wasteful expenditure stands at R140 million on account of interest paid due to late payments to suppliers. An irregular expenditure of R198 million was incurred due to non-compliance with supply chain management requirements.
There is also a huge underspending in capital grants by R369 million due to the municipality not monitoring the usage of grant funding by the National Treasury. This led to the treasury holding back R377 million. In the previous year the municipality underspent R571 million.
Steenbok listed many capital projects on infrastructure that were not even started. That included two projects on the sewerage system, 16 km of work on water pipes, and 119 household sewerage systems of which none were completed.
In addition, the municipality’s creditor’s payment period was 385 days, and the municipality owed the water board R821 million (2021 to ‘22: R690 166 388) as of 30 June 2023, which was long overdue.
Steenbok said these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the municipality’s ability to continue.
“When it comes to performance information, there are many concerns. Management is not doing oversight and do not do proper record-keeping.”
In her report, Steenbok said the MMM only delivered 37% of its key service delivery function. A growing concern for the AG is that there is no effective system of control for revenue management, and the MMM was unable to obtain sufficient, appropriate audit evidence that revenue due to the municipality was calculated monthly.
Dirk Kotzé, DA councilor, said in a news release after the meeting that the DA welcomes the investigations by the Special Investigation unit (SIU) into allegations of corruption within the metro police and Integrated Public Transport Network (IPTN), but is disappointed that the AG stated that the MMM has not yet submitted all documents to the SIU to continue with the investigation.
“The national intervention failed to improve the state of the metro,” he said.
Prof Elizabeth Snyman-Van Deventer said at the meeting this was the worst AG report in the past six years. “There is absolutely no improvement.”
Economic Freedom Fighters (EFF) councilor, Elisha Sebolao, said the ANC’s cadre deployment is killing the city.
“Workers are paid for overtime while they sit in taverns during the day. We can go now, they are sitting and drinking alcohol.”
He said the decision to appoint a disciplinary board was taken two years ago, but still nothing has happened.
Opposition parties agree that this step will go a long way to accomplish consequence management in the MMM.
