NELSPRUIT – The assets of Mbombela Local Municipality (MLM) have decreased over the past financial year, while its liabilities have increased.
The municipality tabled its audited annual financial statements to council during a special council meeting held on Thursday afternoon. The report deals with the 2012/13 financial year, which ended on June 30.
According to the report, the value of the municipality’s total actual assets decreased by R56,6 million or one per cent. Council’s total liabilities increased by R34 million, or three per cent, to stand at R1,1 billion. This amounted to a variance of R415 million from MLM’s budgeted total liabilities which was R644 million.
The Auditor-General (AG) expressed an unqualified audit opinion on MLM’s finances. The AG found that theft and illegal connection of amenities caused MLM to lose R39,7 million for electricity and R2,7 million for water.
The municipality also have receivables such as property rates and taxes as well as outstanding water bills totaling R259,6 million and noted that the recoverability of these amounts were “doubtful”.
MLM’s deficit decreased to R91 million, which the municipality noted was partially attributable to the underspending on capital conditional grants since the revenue can only be recognised when the conditions of the grants are met. This amounted to R138,5 million of its conditional grants going unspent.
The AG noted that, “As a consequence, the municipality did not achieve its objective in providing infrastructure”. The report also noted that conditional grants were utilised for purposes other than those stipulated in the grants framework.
The municipality’s audit committee did not review MLM’s performance management or make recommendations to council, as required. “The accounting officer did not take effective steps to prevent unauthorised, irregular or fruitless and wasteful expenditure,” the AG found.
The municipality’s total capital expenditure amounted to R237,8 million. Of this, R6,7 million was on buildings, R16,1 million on community halls and sports fields and R207 million on infrastructure. R7,6 million was also spent on other assets such as motor vehicles and office equipment.
The mayoral committee agreed that meetings between departments and Municipal Public Accounts Committee (MPAC) regarding the annual report be scheduled.
