A discussion on the auditor-general’s (AG) report on the financial statements of the J.B. Marks Munici- pality for 2018/19 and 2019/20 took place at the Madiba Banquet Hall on Thursday, 31 March.
MPAC (Municipal Public Accounts Committee) chairperson, Mr Rufane Makousa, other members of MPAC, municipal officials and members of the public attended the meeting.
Topics under discussion included the key performance areas like basic services delivery and infrastructure development, and clarity on the AG’s report.
The AG’s report emphasised the poor consequence management and internal control deficiencies behind J.B. Marks’ irregular expenditure of R2,173,405,136 for the referenced financial years.
The 18/19 AG’s report emphasised various forms of irregular expenditure, amounting to R24,347,259, related to the Boikhutso bulk water supply, road- and storm water construction in Ikageng Extension 7, and the construction of the Appeldraai internal road development.
The 19/20 report stated that irregular expenditure of R54,832,180 was incurred on the following key projects: upgrade of Ikageng sports fields, the rehabilitation of roads in Dassierand, Felophepa landfill site, construction of the disaster management centre, upgrading Potchefstroom water treatment works and upgrading Ikageng’s pump station.
Goods and services with a transaction value of below R200,000 were also procured without obtaining the required price quotations, in contravention of SCM regulation 17 (1)(a) and (c) in both 18/19 and 19/20 financial years. “The performance management system and related controls were inadequate as they did not describe how the performance planning, monitoring, measurement and reporting processes should be conducted, organised and managed, as required by regulation 7(1) of the municipal planning and performance management regulations,” stated the report.
It is also disconcerting that the AG stated in point 61 that “allegations of financial misconduct laid against officials of the municipality were not investigated as required by section 171 (4) of the MFMA.” Unauthorised, irregular and fruitless and wasteful expenditure incurred by the municipality was not investigated to determine if any person is liable, as required by section 32(2)(a) and (b) of the MFMA.
According to the AG’s report, the accounting officer did not exercise adequate oversight regarding financial and performance reporting and compliance with legislation.
“There is an overreliance on consultants to prepare financial statements with a limited transfer of skills to municipal finance staff. Senior management did not implement adequate control disciplines over financial and performance reporting and compliance with key legislation by ensuring that action plans developed were adequately and timeously implemented to address prior year findings. Management does not have an adequate risk strategy that addresses identified risks in supply chain management and non-compliance with laws and regulations,” stated the report.
