By REGINALD KANYANE
The divergences and non-compliance continue to rear their ugly head at the Dr Ruth Segomotsi Mompati District in Vryburg. This comes after the Auditor-General (AG) raised various challenges facing the embattled municipality in his report.
This week, the municipality briefly appeared before North West Provincial Legislature’s Standing Committee on Provincial Public Accounts (SCOPA) after allegations that it has awarded contracts to companies without following proper supply chain management procedures.
The municipality was also found to be in contravention of the Municipal Finance Management Act (MFMA) for investing R150 million allocated for Infrastructure Regional Grant (IRG) into the now defunct VBS Mutual Bank.
The SCOPA provincial chairperson, Job Dliso said, the construction contracts were allegedly awarded to contractors that were not registered with the CIDB. He said, this was in contravention of Section 18(1) of the CIDB Act 58 and the preference point system was also not applied for some of the procurement of goods and services above R30 000 as required by section 2(1)(a) of the Preferential Procurement Policy Framework Act.
“Also, some quotations were accepted from bidders who did not submit a declaration on whether they are employed by the state or connected to any person employed by the state, as required by Supply Chain Management regulation.
“Furthermore, the AG was unable to obtain sufficient appropriate audit evidence for infrastructure and work in progress. There was non-submission of information, including material unexplained differences between the financial statements and accounting records caused by inadequate asset management controls,” he said.
Dliso urged the municipality to submit a detailed post-audit action plan and litigation reports.
The AG acting senior manager, Johan Le Roux said, their findings showed that, there is instability in key management positions at the municipality and there is an overreliance on consultants for financial reporting and asset management.
“There is a lack of response by management and political leadership to enforce consequences management for poor performance and supply chain management transgressions.
“The municipality also incorrectly calculated the depreciation expense using incorrect useful lives, which resulted in infrastructure and buildings included in property, plant, and equipment being overstated by R20 776 782,” Le Roux said.
He said, however, that the depreciation and amortisation expenses have been understated by the same amount. Le Roux said Section 125 of the Municipal Finance Management Act (MFMA) requires the disclosure of unauthorised expenditure incurred, but the municipality incorrectly calculated unauthorised expenditure incurred, which resulted in the unauthorised expenditure to the financial statements being overstated by R103 619 83.
Meanwhile, the acting Chief Financial Officer (CFO) at the Dr Ruth Segomotsi Mompati District Municipality, Morena Mofokeng said: “The information relating to the CIDB and preferential points is available. The challenge was that, we were unable to provide the information to the AGSA within the stipulated time due to internal delays.
“However, the municipality has endeavoured to make a folder with the necessary information relating to CIDB and preferential procurement points and include them in the audit file so that they are readily available to the AGSA.”
Mofokeng further said the information relating to the preferential points is also available. He added that, the challenge was that, they were unable to provide the information to the AGSA within the stipulated time due to internal delays.
“The district has endeavoured to make a folder with the necessary information relating to preferential procurement points and include them in the audit file so that they are readily available to the AGSA.
The North West Cooperative Governance and Traditional Affairs acting Head of Department, Mamorena Lehoko said they have raised few apprehensions with the municipality over water issues.
Lehoko said it is disturbing that there is no Service Level Agreement (SLA) in place between the municipality and Sedibeng Water. According to the report, the municipality owes Sedibeng Water R635 million, which is a historical debt.
The Guardian 