Newcastle Municipality receives unqualified audit report amid challenges
The Auditor-General (AG) has awarded the Newcastle Municipality an unqualified audit report for its financial performance, commending the municipal management team for their efforts in driving positive change.
However, the report also highlighted areas in need of improvement, including a rise in fruitless and wasteful expenditure.
While unauthorised and irregular expenditure decreased from previous years, fruitless and wasteful expenditure surged by R10 million.
The increase was attributed to cash flow challenges that prevented the municipality from meeting some creditor payment deadlines, resulting in interest and penalty charges.
The AG’s report also pointed to several critical areas requiring attention, such as on-going water losses and challenges faced by indigent residents who struggle to pay for rates and services.
The municipality’s Indigent Policy, which helps cover liabilities for these residents through portions of the equitable share, was recognized as a positive step toward ensuring fairness.
The AG provided a comprehensive analysis, offering recommendations to improve the municipality’s performance and move towards achieving a clean audit in future reports.
These recommendations were well received by the council, which expressed its commitment to addressing the outlined concerns.
The AG’s report was presented at the municipality’s first special council meeting of 2025, which took place on January 24 following the Manco and Exco meetings earlier in the week.
In addition to the audit report, the council adopted several other key reports, including the Executive Council (Exco) Report, the Mid-Year Budget and Performance Reports in line with Section 72 of the Municipal Finance Management Act (MFMA), the Draft 2023/2024 Annual Report, and the write-off of historical irrecoverable debt by the Department of Water and Sanitation.
The meeting also saw the inauguration and swearing-in of Samantha Shaw, who was elected as a new representative from the Action SA Party.
Additionally, Cllr. Zwelisha Nxumalo was elected unopposed as the new Whip of the Council. In his acceptance speech, Nxumalo thanked Action SA, coalition partners, and fellow councillors, pledging to lead with transparency, accountability, and integrity, and to serve the people of Newcastle with fairness and dedication.
The council concluded the meeting with a renewed focus on improving municipal governance and service delivery, reaffirming its commitment to transparency and responsible financial management.
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