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Nelson Mandela Bay has been handed a second successive qualified audit opinion by the Auditor-General.
The A-G says in his audit report for the 2012/13 financial year that he has issued a qualified audit opinion because the municipality “did not have adequate systems in place to identify and disclose all irregular expenditure incurred during the year” as required by the Municipal Finance Management Act.
The A-G says the irregular expenditure disclosed in the financial statements is understated by R935.4 million.
The A-G also points out that of the total number of 112 targets planned for the year, nearly 50% were not achieved, adding that the reasons for this were the “poor implementation and monitoring of the budget and a lack of actions taken during the year to correct the under-achievement”.
Metro Minute reports that the Auditor General was also critical of the situation with regard to procurement and contract management, stating that awards were made to service providers in the employ of the Metro or whose directors or principal shareholders fell into this category.
Meanwhile, Nelson Mandela Bay Mayor Benson Fihla says the Metro has “developed an action plan to address the findings” of the Auditor-General.
In his foreword to the metro’s Annual Report, the Mayor said the situation was being closely monitored.
In her response to the A-G's report, Acting Chief Financial Officer Barbara de Scande said the municipality will “implement the necessary systems to identify and disclose irregular expenditure relating to tenders awarded.
De Scande said a circular will be issued to all municipal employees requesting them “to disclose any awards made to them. The required declarations will be obtained and verified as part of the Supply Chain Management process”.
She added that a circular will also be issued requiring employees to disclose particulars of awards to close family members.
