The regression in an audit outcome should have come as no surprise to the Nelson Mandela Bay municipality as the city failed to heed warnings from the auditor-general.
The city declined across key metrics leading to the qualified opinion for the 2023/2024 financial year.
The regression comes after an unqualified opinion in the previous financial year which the city attained for the first time in 12 years.
The AG’s opinion was debated at Thursday’s council meeting.
Weak controls, a lack of accountability and leadership instability were highlighted in the audit outcome.
The opinion is contained in the 2023/2024 annual report.
At the meeting, AG senior director Thembela Mseleni said the outcome should come as no surprise as the issues had been raised in the previous report.
“With regard to the financial statements, in the previous financial year, it was not clean but unqualified with findings, there was an improvement but we highlighted that we do not think that those improvements will be sustained,” Mseleni said.
“With the annual performance report, we selected key basic service indicators we think affect residents in these areas, and for the last three years, there have been material findings.
“With compliance with legislation, we picked up that there has been no improvement at all.”
Some of the material findings in the report are:
- Expenditure management;
- Revenue management;
- Consequence management;
- Procurement management;
- Asset management;
- Environment management; and
- Strategic planning and performance management.
The annual report was tabled by mayor Babalwa Lobishe who convened a commitment session in December.
She brought together key stakeholders to devise targeted interventions aimed at enhancing financial management, compliance and performance monitoring.
“I have formally engaged the MEC for finance [Mlungisi Mvoko] to provide hands-on technical expertise and support in critical financial disciplines, including budget and expenditure management, revenue enhancement strategies, financial accounting improvements and supply chain and contract management reforms,” she said.
Lobishe welcomed the audit report, saying the municipality was committed to implementing its recommendations.
Lobishe was criticised by councillors who said that she had no plan to improve the city’s standing.
ACDP councillor Lance Grootboom said the municipality could not implement the AG’s findings because it lacked the capacity.
“When you look at our internal audit plan for the year, they only covered 70% of that plan,” he said.
“Out of the 60 low- and high-risk findings they only addressed 42.
“The problem at internal audit to ensure proper control is that they operate with 43% of the needed staff.”
“The mayor has failed to talk about that.
“What is the plan to address the water losses? What is the plan to make sure contractors are appointed on time so we do not continue to lose grant funding?” he said.
DA councillor Brandon Pegram slammed a six-page turnaround plan presented by the mayor which he said had been used for the past four years.
EFF councillor Ndumiso Nqwazi said the issue of presenting credible financial statements needed to be addressed.
The Herald
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