HIGHVELD – The total disregard for prescribed legislation and supply chain management policies by the Govan Mbeki Municipality, has allowed corruption to flourish.
This was revealed during the oversight visit by the Select Committee on Cooperative Governance and Traditional Affairs, Water and Sanitation on Tuesday, 15 September.
For the 2018/19 financial year the municipality showed an upward trend in irregular and fruitless expenditure of R1,34-billion, wasteful expenditure of R164-million and unauthorised expenditure of R568,5-million.
The committee suggested that the municipality is in a state of paralysis and urgent action needs to be taken to reverse the bad state of its administration.
Mr China Dodovu, chairperson of the committee, said the committee is concerned that the debt book of the municipality is standing at R2,2-billion.
“The impact of the debt owed to Eskom, which is just over R2-billion, and to Rand Water, which is owed R317-million, has an adverse impact on the functioning and provision of services of those entities.
“The municipality has to make plans for paying their debt.”
The committee raised concerns about the outstanding audit for the 2018/19 financial year, due to the late submission of financial statements.
Mr Dodovu said the submission of financial statements is a legal requirement that must be adhered to.
He said non-submission of financial statements raises suspicions.
“While the committee welcomes the suspension of the municipal manager because of the non-submission, we are concerned that the chief financial officer was not subjected to similar consequence management to enable proper investigation.
“What is even more concerning is the fact that the non-submission of the financial statements follows a disclaimer audit opinion for the 2017/18 financial year.”
The committee said the expenditure of R748 000 to external consultants to prepare financial statements, is also a concern, especially in the context that this does not account for the entire bill in preparing the financial statements.
The committee has called for a skills audit report on the financial section of the municipality to ascertain the skills base, as well as the reasons for outsourcing this function.
The committee said that municipal management displays a lack of appetite to implement consequence management for ongoing deviation from laws, regulations and controls over consecutive years. Meanwhile, the committee welcomed the announcement of the completion of a forensic investigation by the provincial executive and will await its tabling to council.
They demanded a full report with envisioned accompanying actions against those found to be in the wrong at the municipality.
The committee also raised concerns about the lack of a public participation strategy within the municipality, which undermines Section 152 (1) (a) and (e) of the Constitution.
They instructed the municipality to provide a detailed report on public participation initiatives taken in the previous financial year.
Regarding a prospective R10-billion public-private partnership development initiative between the municipality and private stakeholders, the committee is concerned by seemingly vague stumbling blocks.
“While the committee is not advocating for any specific partnership, it has called for the municipality to work with speed to engage the private sector to invest in the city with the aim of enabling economic activity, which will lead to employment opportunities.
“Any proposal that is good for the advancement of the city and its residents must be taken through the legislated approval processes to ensure that the people of the area benefit from such proposed developments,” Mr Dodovu suggested.
The committee visited the municipality to interact with the municipality’s stakeholders to assess the municipality’s economic development plans and budget, private funding on municipal service delivery projects, technical and funding support provided to the municipality in achieving the goals and objectives of economic development plans.