Municipality blew over R800-million of ratepayers money, Auditor General finds

AbaQulusi Municipality is under fire for racking up irregular, unauthorised, fruitless and wasteful expenditure of over R800-million and failing service delivery.
Vryheid AfriForum has written to the municipality requesting to assist in identifying key areas to improve and continuously promote the standard of living, as well as the safety of their members and the general community.
The request follows the Auditor General giving the municipality a bleak ‘Unqualified – Emphasis of Matter Items’.
This is an improvement on the previous year’s AG’s report which was a deemed to be a ‘Qualified’ report.

As the time for drafting the IDP for 2023/2024 is getting closer, AfriForum requested to form part of the public participation process for the drafting of the municipality’s IDP by submitting a few pressing issues that need to be resolved and therefore need to be included in the IDP.
Abaqulusi Local Municipality (ALM) showed a total income of R675.1 million (67%), while R455.5 million is its own revenue.
AfriForum is concerned about the following findings in the audit report:

1. Unauthorised Expenditure of R486.6m;

2. Irregular Expenditure of R309.5m; and

3. Fruitless and Wasteful Expenditure of R24.7m.

AfriForum has suggested ‘that urgent measures be taken to address these expenditure issues and that necessary legal action should also be taken’.
“The audit report indicates four material irregularities and demands immediate action against these irregularities.”

The average days to pay ALM creditors were 96 days in 2021/22, while Section 65(2)(e) of the MFMA dictates that ‘all money owed by the municipality be paid within 30 days of receiving the relevant invoices unless prescribed otherwise for certain categories of expenditures’.

The AG report indicates that 70% of ALM’s debt is unrecoverable and an average debt collection time of 75 days. This is of concern and may result in a shortfall of cash flow and will contribute to service delivery challenges within the municipal area. This may also lead to protest action.

A lack of skill and poor project management resulted in ineffective consultations in the financial unit, to the expense of R8.0m.

Maintenance expenditure was R10.6m and 1.5% of the 2021/22 budget. National Treasury guidelines MFMA Circular No. 71 require an 8% allocation to infrastructure, plant, and equipment maintenance. AfriForum requests an urgent allocation of 11% of the budget to address maintenance to improve the life-span of critical equipment affecting service delivery.

The report shows a 36% overall vacancy rate within the municipality. “This may be a contributing factor in service delivery and needs urgent attention to fill vacancies in critical posts affecting service delivery.”

AGSA is concerned about internal control assessments and financial management controls.
AGSA’s report further showed that findings were made in the:

1. Procurement and contract management legislation,

2. Expenditures management legislation,

3. Legislation on effective consequences,

4. Asset management legislation,

5. Material misstatements or limitations in submitted annual financial statements,

6. Unauthorised, irregular, as well as fruitless and wasteful expenditure, and

7. Transfer and conditional grants.

Areas of concern were: uncompetitive and unfair procurement, awards to employees/councillors and awards to other state officials. AfriForum condemns these actions and urges immediate preventative actions.

According to the AG, ALM had water losses of 54% to the value of R9.5m. An ageing water infrastructure is a contributing factor and therefore urgent attention should be given for upgrading the water distribution infrastructure.

Suggestions for the IDP:

AfriForum wants to remind Abaqulusi Local Municipality that property rates are for non-invoiceable services and therefore ratepayers cannot accept poor service delivery. These non-invoiceable services include installing and maintaining of streets, roads, sidewalks, lighting, and storm drainage facilities; operating parks, recreational facilities and cemeteries, etc.

The following concerns were identified by the Vryheid community:

1. Electricity network and supply challenge;

Abaqulusi Local Municipality wants to develop local business and economics. To achieve this goal, the electrical supply network is key. The IDP shows an ageing electricity network, but no plans to upgrade the current network. The following lines/networks need urgent upgrades:

a. Elandsberg Line

b. Schotchill Line

c. Zaailaagte Line

d. Scheepersnek Line

e. Vryheid, Bhekuzulu and Lakeside towns must now be included, as electricity problems have now escalated into these townships, whereas they used to be more stable until a few months ago.

AfriForum will consider legal action to access electricity supply according to the minimum standards set out by NERSA.

Bad state of roads in residential and industrial area:

Too little to no funds are allocated for road maintenance. The life-span of the roads needs to be extended by repairing potholes. The streets in town, industrial area and Bhekuzulu are falling apart. There needs to be a plan for repairing potholes to prevent the streets from falling apart completely.

a. President Street – between Market and South Street

b. Market Street – between President and West Street

c. All potholes to receive immediate attention

d. The quality of repairing potholes is far below standard – it seems like workers have no idea of the correct way to repair potholes.

Condition of the R33 and R34 (main street) and the cleanliness of town:

AbaQulusi is one of the four main entrances into KwaZulu-Natal. One should therefore acknowledge that the R33 / R34, which is the town’s main road, should be in a good state. We want to bring to AbaQulusi’s attention that the Stillwater bypass also needs urgent attention, for this road carries a lot of traffic and connects local agriculture activities with town. The cleanliness of the town for this reason should be well addressed. Bad roads will not attract investors and tourism. AfriForum does not see any effort from the IDP to improve the above two issues.

Communication to the community:

The AbaQulusi Call Centre is a disgrace – the staff do not understand English properly, cannot spell and are not available when the power is off. That is exactly when they should be available.

Landfill site:

AfriForum does a yearly audit of the AbaQulusi refuse dumpsite and it fails miserably. It is not maintained properly. It is also unsafe to visit the landfill site.

AfriForum will consider criminal charges against ALM for the current state of ALM’s landfill site.

Water supply:

AbaQulusi is responsible for the water supply in and around town. The unacceptable number of non-compliance and water interruptions has an extreme impact on the town’s future and urgently needs more funds to repair ALL the pumps at the water supply. The water supply network also needs an urgent upgrade to reduce pipe bursts. ALM losses to potable water are unacceptable and unconstitutional.

Sewage:

Sewage is the responsibility of AbaQulusi Local Municipality, but is not managed properly. AbaQulusi Local Municipality must act on behalf of the residents. We have various sites where sewage is leaking into the streets and then to rivers, especially in Bhekuzulu and to the Klipfontein Dam.

The pump station at Bhekuzulu has not been in a working state for several years and raw sewage flows directly into Besterspruit. AfriForum requests immediate attention to address this spillage.

The waste water treatment works (WWTW), next to Vryheid town, is not fully operational and sewage is polluting the Wit Imfolozi stream ending in Klipfontein Dam.

“Should our requests not be attended to, AfriForum will be considering legal action for improvement of the state of the “WWTW to full production. This may include criminal charges and legal action against management in person,” AfriForum said in their letter.

Cemeteries:

The cemetery has to be fenced for safety purposes. The municipality needs to take action regarding this issue urgently.

Accounts department:

Ratepayers have a huge problem with the accounts department and it needs to be resolved.

Someone at the accounts department is needed who can take a decision and resolve a problem or fault within 30 days and not 12 to 24 months. No business can survive if the accounts department is not functioning correctly, as finance is the heart of any organisation.

“AfriForum takes note that the tractors and equipment of the company that cuts grass is not roadworthy, and AbaQulusi needs to address this problem. The slashers used for cutting grass behind tractors are life threatening – these do not conform to any safety standards and should be replaced with SAFE equipment. A contract like this should stipulate that all equipment and vehicles should be safe in public areas, and should be roadworthy,” commented AfriForum Vryheid Chairperson André van der Walt.

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The news provided to you in this link comes to you from the editorial staff of the Vryheid Herald, a sold newspaper distributed in the Vryheid area.