The Madibeng municipality paid R15.4 million to consultants to prepare its financial reports because they lack the skills to do it. To make matters worse, the consultants were ineffective because of the municipality’s lack of records and documents.
This was one of the findings of the Auditor General (AG) Tsakani Maluleke during her latest consolidated general report on local government audit outcomes for 2020/2021.
Madibeng received a disclaimer audit outcome for the fifth consecutive year. The AG expressed serious concern about the financial health of the municipality, saying there is doubt about the municipality’s ability to continue operating.
“Payments to service providers pose the biggest risk. For example, we could not confirm whether goods and services were received by Madibeng for all payments to suppliers, as the municipality could not provide evidence of basic controls and records (such as delivery notes or invoices signed by delegated officials) to indicate that services had, in fact, been provided. This could mean that payments were made for goods and services not received, which we will be considering as potential material irregularities,” the AG said.
She also used Madibeng as one of the examples of the impact of infrastructure neglect on service delivery and a municipality that poses a threat to the environment. “Mothothlung wastewater treatment works has been completely demolished due to vandalism and theft, but still receives sewage inflows that are discharged without being treated.
Other findings include:
• Key officials lack appropriate competencies
• 50% of senior management posts were vacant.
• The performance report was unreliable and not of good quality.
• Competitive and unfair procurement
• Prohibited awards to other state officials
Irregular expenditure related to supply chain management
The AG found that the 2022 budget will pay for the expenditure of the previous year(s), leaving less than half of the budget for this year.
Madibeng also owed Eskom R39.9 million at the time of the audit and its year-end bank balance was in overdraft.