Msunduzi ‘trying its best’ to move from disclaimer audit opinion
Msunduzi is pulling out all the stops to get out of its disclaimer audit opinion, with councillors saying even a qualified opinion would be a welcome relief.
The City will be submitting its statements for the 2017/18 financial year to the office of Auditor-General (AG) Kimi Makwetu today (Friday).
The acting municipal manager, Neli Ngcobo, said the finance and internal audit units have done everything they could to cover all the bases with both the 2017/18 statements as well as addressing the 41 disclaimer issues.
The municipality also brought in three audit firms to review their statements for gaps that could result in audit queries from the AG.
This week Ngcobo produced a report with adjustments worth R250 million before council for its approval. This expenditure, which includes R849 890 of bad debts written off, was not budgeted for, therefore not accommodated during the mid-term budget adjustment in January.
“Expenditure incurred but not budgeted for is called unauthorised expenditure,” read the report.
Ngcobo conceded that adjustments were the result of poor planning by the departments. These were done through the virement (the process of transferring items from one financial account to another) policy. These were never brought before the council previously but one of the audit firms recommended it be done this year in case the AG wanted a council resolution.
“We are closing all the gaps because we need to move from a disclaimer to at least a qualification or even unqualified [finding],”
Mayor Themba Njilo said being a municipality with a disclaimer had made the previous financial year difficult for everyone because the council and administration were constantly reminded of it.
“We don’t want to go back to a disclaimer. The acting municipal manager and her team have done everything possible to get us out of the disclaimer and I’m confident that like Moses [from the Bible] they are leading us from the hardship of Egypt,” he said.
ANC councillor Mehmood Oumar, who is also a member of the finance committee, said credit must be given to Ngcobo and her team for their efforts.
“We may not get a clean audit but it won’t be because of the lack of trying by the finance and internal audit teams.
“The reality is that the acting municipal manager has had a lot on her plate but we commend her for the work she’s been doing and we hope going forward everyone will work together so that the people of Msunduzi can get the quality of governance they deserve because that translates to improved service delivery,” he said.
DA caucus leader Sbongiseni Majola said Ngcobo’s commitment to turn things around was admirable, but the municipality was far from a clean audit.
“Some of the issues raised in the previous reports from the AG, such as the high vacancy rate, non-compliance with key legislation and not spending the conditional grants that are given to us to improve service delivery have not been addressed,” he said.
Majola said the municipality also delayed in lifting the 19 suspensions that were a disclaimer issue as they cost the City R11 million in wasteful expenditure in 2016/17.
“Our revenue collection is not at where it should be at. We are losing millions of rands as a result of a disastrous billing system.
“When it comes to water services, we are operating at a loss because you have ageing infrastructure and thousands [of people] are on a flat rate in Vulindlela. Then there is theft of electricity and the repeated failure to roll out prepaid meters,” he said.