Msunduzi’s finances hammered

2014-01-23 00:00

THE auditor-general (A-G) has hammered the state of Msunduzi’s finances, giving the capital city a qualified audit report.

This is a regression after two years of unqualified audits and comes in a year the government had targeted for all municipalities to attain clean audits.

The reason for the qualification is a long-standing gripe by residents — the mess in the municipality’s meter readings.

Auditor-General Vanuja Maharaj told a council meeting yesterday that she was unable to obtain sufficient appropriate audit evidence for revenue from service charges, as 30% of meter readings on which this amount was based were estimated over periods exceeding a year.

Maharaj said the municipal management had been unable to provide evidence that this estimate was based on reliable historical records. In November last year, the A-G carried out a water and electricity meter audit, and found meters that had not been read for eight years and more. She warned then that if broken meters were not replaced and readings not obtained, this could lead to an audit qualification.

The A-G expressed concern on several other issues, adding that the municipality did not achieve its own targets on basic service delivery.

She was critical of the revenue lost in the water account (R92,41 million from 15 701 747 kilolitres) and from electricity (R122,34 million from 202 469 552 kilowatts).

She noted that Msunduzi had underspent its capital budget by more than R33 million and its grants by R170,46 million, meaning that the municipality had not achieved its basic service delivery and infrastructure development objectives.

The A-G was also critical of oversight at the municipality, saying the municipal manager did not monitor the implementation of plans to address internal control deficiencies and prevent repeated adverse findings.

“There were inadequate processes, policies and monitoring controls over financial transactions and the financial reporting process. This has resulted in numerous material misstatements identified by the audit that were subsequently corrected,” Maharaj said.

Mayor Chris Ndlela described the report as devastating, especially in light of the support the municipality had been given by the A-G’s office to address its audit matters.

DA caucus leader Bill Lambert said the report was received with “absolute shock”.

Municipal manager Mxolisi Nkosi apologised unconditionally to the council, saying, “We thought we had done everything in our capacity. There is absolutely no excuse for that. I am not disputing the A-G’s report,” he said.

Nkosi added that he still believed that the Msunduzi Municipality of today was better than that of the past.

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