Municipality disclaimed: Greaver hints at sabotage
Polokwane Municipality’s dream of getting a clean audit in line with government’s clean audit target of next year has been dashed for good.
This after the richest local municipality in the province received an embarrassing disclaimer of opinion audit outcome from the Auditor General, its first in four years and the third since 2003.
Delivering the report to council during Thursday’s Council meeting, Auditor General South Africa (AGSA) representative, Ms Ulde Shumba said the municipality had been disclaimed because of a long list of matters.
“ The irregular expenditure which constitutes the non-compliances with the supply chain processes as defined in terms of the supply chain regulations and all the policies that governs the process amounted to R154 million, that’s the extent of the irregular expenditure which we identified that was not disclosed by management. We also identified fruitless and wasteful expenditure amounting to R692 000,” Shumba said.
One of the basis of the opinion was the municipality’s revenue woes, which according to the report includes service charges of more than R781 000 000 of consumer accounts which have been incorrectly billed resulting in under billing of R13 169 936 and over billing of R53 244 379 while a further 20 8842 accounts on the system did not reconcile to the meter readings for May and June last year.
An amount of R140 440 390 was incurred as unauthorised expenditure while other new qualifications areas were discovered.
The report also mentioned an amount of R85 746 484 which was incurred as a result of losses incurred during the water and electricity distribution process, a matter the Democratic Alliance (DA) Caucus Leader, Cllr Frank Haas has vowed to request Polokwane Executive Mayor, Cllr Freddy Greaver’s urgent intervention on. “The 39% water loss costs the municipality an estimated R60 million per annum whereas there is not enough budget set aside to rectify or solve the crisis,” Haas said in a media statement released on the matter.
The DA’s Provincial Leader, Mr Jacques Smalle also requested that the Hawks open a case against the municipality over the audit report on Monday. “The DA firmly believes that the AG’s findings provide a clear basis for such gross mismanagement. The Criminal Investigations Agencies must now step in and bring to book all those officials, past and present, responsible for this state of affairs,” he said.
Polokwane Observer met up with Greaver and the administrative head of the institution, the Municipal Manager, Ms Conny Mametja for an interview on the unfortunate report on Monday and though he reiterated that he took responsibility for the matter, he seem to hint on several instances on possible sabotage.
The municipality earned themselves 166 queries and about 58 findings from the AG but Mametja said most of the issues flagged could be dealt with almost immediately.
Greaver said a number of the major issues mentioned in the AG’s report such as fraud on overtime and ghost workers were not uncovered by the audit but by an investigation conducted by the municipality before, “almost hijacking the cleaning up” the municipality was trying to do. “It’s not something that surprises us because it is something that we have found. Then the AG simply took our report and made a finding on that, which is correct, they must do it but it is something that we have investigated ourselves,” he said.
Greaver said during a staff meeting employees admitted to having ripped of the municipality in irregular overtime payments. “People have bought houses and have bought cars and have embraced a certain lifestyle based on consistently, I can’t say fraudulent because they didn’t defraud, but it was irregular overtime,” he said adding that there was no way he could have turned a blind eye to the matter.
“There are 23 officials who have to be charged on various things that went wrong. You obviously will have to understand that these people are going to hit you where they can and perhaps they have succeeded,” Greaver said, however emphasising that he would not label the situation sabotage.
Another noteworthy development was the asset register which was audited was not the one the municipality had paid PricewaterhouseCoopers to prepare and both Greaver and Mametja claim to have no knowledge of who put the audited one in the municipality’s system for the AG to work on.
He added that the appointment of the company contracted to run the municipality’s payroll system was also brought into question by the municipality’s forensic investigation as the tender was never public advertised. “Now here’s a company that must help us to comply with the AG. If you look at the investigation report, it questions how this contract was even signed in fact two of the 23 people who must be charged are people who have signed that contract with the authority, they don’t have the authority, without the knowledge of the accounting officer, without it having gone out on a public tender. Are you surprised then that we didn’t get the documents on time?” he said of the late submission of payroll documents to the AG that also proved to be vital in the audit outcome.“Maybe if we didn’t investigate, maybe we would have had that on time,” he added.
On the millions of Rand that were lost due to water and electricity, Greaver said the city’s aging water infrastructure needed at least R202 million to replace the water pipes and the municipality has also decided to move towards a smart technology where even prepaid water would be considers as the high number of pipe bursts, leaks, illegal connections and inaccuracy of meter readings were a headache.
Commenting the municipality’s only entity which he previous described as a liability to the municipality, Polokwane Housing Association (PHA) Greaver said it was still a liability but one worth having as it had a lot of potential. PHA received qualified audit outcome.
Greaver said he was not obsessed with audit, but the next audit outcome of the municipality would definitely not be a disclaimer, which is the worst outcome of all.
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