SECUNDA – The Govan Mbeki Municipality submitted incomplete Annual Financial Statements (AFS) six months after the deadline.
The AFS were supposed to have been submitted by the end of June 2019 and reasons for GMM’s late submission were not stated to the public.
According to Section 126 of the Local Government Municipal Finance Management Act 56 of 2003, a municipality is given two months following the end of a financial year to submit its annual financial statement to the Auditor General.
Ms Thandi Ngxonono, executive mayor, is unhappy with the AFS that were submitted, because they are incomplete and therefore not credible.
She instructed Mr Fekani Mndebele, municipal manager, that this must not happen again.
“We have learned the hard way,” said Ms Ngxonono at the recent council meeting held in the council chambers in Secunda on Thursday, 30 January.
“I have since given clear marching orders to the MM that the issue of the AFS must be properly managed to avoid the 2019 situation.
“We can successfully manage the AFS if we can make this a permanent feature in our activities, by so saying, I mean we must do these AFS on a continuous basis every month to balance everything.”
She said the municipality’s finances remain a serious challenge and everyone must help to improve it.
The Democratic Alliance remains concerned with continuous disarray in the books of the Govan Mbeki Municipality.
The party said the inability of the municipality to submit the AFS came after the municipality had appointed a service provider that would assist in compiling the document and resolving the concerns raised by the disclaimer in the Auditor General’s report of the 2017/18 financial year.
The municipality apparently experienced problems with this service provider which eventually resulted in a case at the High Court that had a favourable outcome for the municipality.
Ms Ciska Jordaan, DA caucus leader, said despite the favourable outcome of the court case, the municipality was faced with a tremendous amount of work in attempting to compile the report and resolve the issues raised in the disclaimer since the mentioned service provider had achieved little progress in the drafting of the AFS.
She said the disclaimer that was received by the Auditor General largely highlighted, amongst other things, that requested documentation was not available for scrutiny and that contracts were prolonged in contravention of legislation that requires the advertisement of services following the conclusion of a contract.
“For these issues raised, another risky service provider is to blame since the municipality’s financial migration to another system in the 2017/18 financial year.
“Despite the consolation that the municipality has submitted the AFS, it is highly disconcerting that it has taken nearly seven months to compile a document for which legislation only allows two months.
“Furthermore, crucial oversight over this report has been impossible since no one has been able to set eyes on a final draft.
“In nearly every council meeting since September 2019, an item on the agenda had sought for the condonement of the delay in submitting the AFS.
“The DA has raised the concern numerously that the municipality could not hope for upliftment from a disclaimer raised by the Auditor General in future audits if it is not able to address the issues that are raised promptly and transparently; and submit reports as per the specifications of the legislation that guides local government.”
Mr Sibusiso Hlolweni, leader of the Sakhisizwe Progressive Movement (Sapromo), said according to the Auditor General, late submission is non-compliance, which affects the audit outcome, because the degree of late submission cannot be quantified.
He said the municipality is not going to get a clean audit for the 2018/2019 financial year.
“We have learned that there were 15 areas where the municipality was found in contravention of the audit requirements during the 2017/2018 financial year.
“This means the municipality cannot be trusted to handle finances effectively.
“We believe that the disclaimer we got during the 2017/2018 financial year was the consequences of the previous term audit opinions.
“For several years, the municipality has always received an unqualified audit opinion and it was a matter of time before GMM land into a disclaimer.
“The council has long been celebrating a mediocre in the form of unqualified audit opinion, with no plans in getting a clean audit.”
He said Sapromo is still adamant that the Quality Management and Compliance Committee is the only solution to the service delivery challenges.
