Madibeng spent almost a billion rand on wasteful, irregular and unauthorised expenditure says Auditor General

The municipality received a disclaimer from the Auditor General for the 2015/2016 financial year, meaning they could not provide sufficient evidence in the form of documentation on which to base an audit opinion.
According to the AG report almost R800 000 000 spent was unauthorised. Almost R170 000 000 was irregular expenditure and over R7 million rand was declared fruitless and wasteful expenditure.
These amounts exclude the R1 773 465 274 unauthorised, irregular and fruitless and wasteful expenditure of prior years that has not yet been dealt with.
Regarding the unauthorised expenditure, the AG found this mostly relates to non-cash items that weren’t properly budgeted for. The irregular expenditure excludes R28 766 166 not disclosed by the municipality and awards of R50 668 401 which could not be tested.
The fruitless and wasteful expenditure relates to interest on long-overdue accounts.
The AG also could not determine if goods and services were procured using quotations or if bid specifications were unbiased and allowed all potential suppliers to offer goods and services.
The AG recommended that all the irregular expenditure incurred in the current and previous financial years, be investigated and financial losses suffered by the municipality recovered from the responsible officials. “Disciplinary actions should be instituted against officials who do not adhere to supply chain management regulations.
Regarding the municipality’s financial health, the AG found that the bank balance is materially misstated and the bank recon does not balance. The municipality has cash constraints due to the incorrect billing system and budget monitoring is not taking place.
“The regress audit outcome is mainly as a result of management not fully implementing effective control to ensure that the financial information was reliable before submission for audit,” the report states.

Daleen van Manen

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