Mangaung Metro’s financial woes

2012-02-01 13:01

The Mangaung Metro is battling with serious financial problems, the latest report of the auditor-general (AG) confirms.

According to the AG report for the 2010/2011 financial year, the “current liabilities of the municipality significantly exceeds its current assets”.

The metro is “significantly dependent” on the national and provincial government. Outstanding service delivery debt amounts to a whopping R1.62 billion.

Irregular payments – to the value of R173 million – were made to contractors and service providers. Another R40 million was labelled fruitless and wasteful expenditure.

Several contraventions of the supply chain management (SCM) regulations and the municipality’s procurement policies were identified by the AG.

These include:

» Tenders awarded to government and municipal officials;

» Contracts were extended or modified to the extent that competitive bidding processes were circumvented;

» No proof could be provided that contracts to the value of R404.1million were awarded in accordance with legislative requirements and the SCM policy; and

» The performance of contractors were not monitored on a monthly basis.

The AG issued a disclaimer of audit opinion to the metro – meaning that there was insufficient evidence on which to base an audit opinion.

The DA in the municipality says this is a serious “incrimination on the municipality’s ability to deliver services”. The party is going to meet the senior management team of the municipality later this week to discuss the AG report.

City Press sent questions to the municipality about its cash flow problems a week ago, but it has failed to respond.

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