Madam – Auditor General Report 2013/2014.
Regrettably the undertakings and promises that a clean and unqualified audit report for 2013/14 financial year which was to be the main objective of Council, did not materialise regardless of the fact that millions of Rand were spent on service providers to assist Council in reaching that goal.
Again, as stated in previous reports, reference was made to inadequate reports and systems as well as Council’s poor debtor collection practices. Of grave concern is his finding that the financial statements were not prepared in all material respects in accordance with the requirements of Section 122 of the MFMA. This is a direct reflection on the ability of Council’s staff and service providers to comply with legal requirements.
The comments pertaining to procurement and contract management is an indictment against the Accounting Officer and Management with regard to the implementation of the Supply Chain Management Policy and Regulations. The fact that awards were made contrary to the MFMA and SCM Regulations calls for an immediate investigation. The fact that Section 112 (1) (k) of the MFMA is not being complied with could be seen as a contributing factor for these adverse comments.
The previous report revealed irregular expenditure to the amount of R55 032 583 which was condoned and written off by Council. This was contrary to the provisions of the MFMA. For the financial year under review Council again incurred irregular expenditure for the total amount of R57 203 428 as set out in paragraph 49 of the financial statements. Will Council again just condone this expenditure without a proper investigation? As in the previous report the Auditor General found that Management did not comply regarding financial reporting and compliance with specific legislation and regulations as well as with regard to internal control and we await Council’s response on how it intends dealing with this matter.
We would appreciate it to be informed what action will be put in place to recover outstanding consumer accounts from Councillors which totals an amount of R319 031. This is a very bad reflection on Councillors who dismally failed their responsibility.
Your urgent comments on the above will be appreciated.
Newcastle Ratepayers’ Association.
Response from Mayor, Afzul Rehman:
The Ratepayers Association will never admit that the findings of the AG is far better year on year. I admit we are still struggling with a clean audit, but we have made great strides. We have employed two chartered accountants already, with one more who just wrote his board exams late last year. We have sorted documentation and resolved issues of missing documents and vouchers.
The two qualifications we received were:
1) Assets- it is a year-on-year problem that started in 2008 with the valuation of municipal assets. We will continue to strive to correct it.
2) Leave pay – we have already suspended and charged our HR director for neglecting the duties of her office and failing to manage the department correctly.
We continue to strive to work towards a more perfect audit outcome. It is, actually, the centre of our focus!
