North West 2014 Clean Audit program a pipe dream

Chris Hattingh MPL

DA Leader in North West

During a public hearing in Klerksdorp the North West Standing Committee on Public Accounts interrogated the Matlosana Municipal Management on their latest Auditor General’s (AG) report on the 2012 Matlosana Financial Statements.

The Matlosana Municipality, one of 16 North West Municipalities that received Disclaimer AG opinions for the 2012 financial year, was severely criticized by the AG in his report stating inter alia that

“The senior management vacancy rate rose from 25% in the previous year to 50% in the current year”

“Positions in senior management had been vacant for more than 12 months”

“Officials in key positions lack the skills and competencies to understand and address queries raised during the audit and are unable to perform key reconciliations.”

The declining financial performance of the Matlosana Municipality led to a Provincial Government Intervention into the Financial Administration gazetted during April – however the three administrators remunerated collectively at R191 684 (plus travel and subsistence allowances) had been defiantly and arrogantly prevented by the Municipality to start with their work.

The AG also reported that the Municipality could not achieve 52% of its 237 predetermined objectives during the financial year.

The recorded R103 602 752 financial loss incurred by the Municipality contributing to the fact that the Municipality’s liabilities exceeded its assets by R589 582 550 at the audit date caused the AG to refer to a “material uncertainty that may cast significant doubt on the municipality’s ability to operate as a going concern.” This may be the reasons for the Eskom and Midvaal threats to cut electricity and water provision to the municipality.

Considering the AG finding that the Municipality incurred Fruitless and Wasteful expenditure of R5 720 251, irregularly expended R25 306 656 and could not provide documentary audit evidence for expenditure incurred amounting to R365 747 278, the state of financial administration in the Municipality is critical and a full Administrative intervention should now be considered.

The financial anarchy evident in the Matlosana Municipality, the second largest in the NW and previously regarded as high capacity municipality puts formally and ends to any aspirations to have clean audits in 2014 – a 5 year program that failed miserably.

The root cause for the sad state of affairs of the municipality once again appears to be vested in the lack of capacity in exorbitantly highly paid officials – an unintended consequence of the NW ANC’s subversion of affirmative action by implementing a cadre deployment system in which ANC factions compete for power and the control of financial resources at the expense of capacity, qualifications, expertise and experience.

As in other NW municipalities the situation will deteriorate until and end is put to the deployment of incompetent cadres, an independent skills audit is being done and sound and clean governance returns