VKLM qualified audit – is the ship sinking?
The VKLM debtors’ book on February 28 owed Rand Water almost R890m and and Eskom more than R926m.
The Victor Khanye Local Municipality (VKLM) in Delmas again received a qualified report from the Auditor-General (AG).
However, Diane Bath, the DA Caucus leader in the VKLM, told Streeknuus that the report showed financial irregularities that could be directly attributed to the failure to collect revenue.
“The financial statements submitted for this audit were not prepared per the Municipal Finance Management Act”. (MFMA).
Bath told Streeknuus that the administration had shown a blatant disregard for the local government legislature to the extent that there were misstatements of assets, revenue, expenditure, and disclosure items.
Capital assets were disposed of without the municipal council having, in a meeting open to the public, decided whether they were still needed for the minimum level of basic municipal services and without considering the fair market value of the assets.
This included the economic and community value to be received in exchange for the assets, as required by sections 14(2)(a) and 14(2)(b) of the MFMA.
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Bath said the DA expressed despair at the Municipal Public Accounts Committee’s (MPAC) failure to execute its mandate successfully.
“Maladministration has flourished in this municipality, and the deceitful beneficiaries of cadre deployment have done nothing to counter this.
“It is even more concerning to note that some supporting documents could not be provided, resulting in the A-G handing the municipality a qualified report.”
The municipality’s revenue is at an average of 64%, and the loss of water is at 69%. The VKLM debtors’ book as of February 28 owed Rand Water R890 868 988 and Eskom R926 117 760.
“This speaks volumes about the current VKLM governing capabilities. Their disrespect towards the MFMA has put the municipality into a state of disaster,” Bath explained.
Private businesses and government entities at a provincial level were apparently among the offenders not paying for services.
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As a result, the A-G could not obtain sufficient audit evidence regarding the other revenues collected by the municipality.
Bath further stated that, for many years, the DA had called on the VKLM to implement its debt and credit control policy strictly.
“The VKLM needs to generate cash by increasing revenue and decreasing expenditure”.
According to Bath, a light at the end of the tunnel was that the VKLM finally had a plan for households not connected to the Eskom grid.
They would be connected to meters for adequate billing. Uncollected revenue from the households without meters could go a long way in helping the municipality service its debt with major creditors like Rand Water and Eskom.
National Treasury had deployed a municipal financial advisor to assist the VKLM with the financial recovery plan that the provincial government adopted in 2018.
“The DA will monitor the implementation of the financial recovery plan and continue to keep the municipality and MEC to account”.
