Third suc­ces­sive qual­i­fied au­dit opin­ion for CHDM


THE Chris Hani Dis­trict Mu­nic­i­pal­ity (CHDM) has re­ceived a qual­i­fied au­dit from the Au­di­tor-Gen­eral (AG).

AG’s of­fice se­nior man­ager Caryn Boettger re­leased the mu­nic­i­pal au­dit re­sults for the 2015/16 fi­nan­cial year to ex­ec­u­tive mayor Kholiswa Vim­bayo on Wed­nes­day.

Boettger said im­prove­ments were needed as CHDM had re­ceived qual­i­fied au­dit re­ports for the past three con­sec­u­tive years.

Boettger said the mu­nic­i­pal­ity had not billed all cus­tomers in the past fi­nan­cial year.

As a re­sult, re­ceiv­ables from ex­change trans­ac­tions to the con­sol­i­dated and sep­a­rate fi­nan­cial state­ments were un­der­stated by R40.98-mil­lion, and rev­enue from ex­change trans­ac­tions by the same amount.

“In 2014 you re­ceived a qual­i­fied opin­ion, in 2015 you still re­ceived a qual­i­fied opin­ion, but you ad­dressed the other dis­clo­sure is­sues. You re­ceived a new qual­i­fi­ca­tion in 2014/15 on re­ceiv­ables and rev­enues on ex­change trans­ac­tions and that was pre­dom­i­nately with re­gard to the wa­ter takeover from all the lo­cal mu­nic­i­pal­i­ties in the dis­trict.”

There was “no suf­fi­cient ap­pro­pri­ate au­dit ev­i­dence avail­able to sup­port re­ceiv­ables” from ex­change trans­ac­tions as a re­sult of the sta­tus of the mu­nic­i­pal­i­ties’ ac­count­ing records and the mu­nic­i­pal­ity did not have ad­e­quate sys­tems to iden­tify and dis­close all ir­reg­u­lar ex­pen­di­ture in­curred dur­ing the year.

“The only thing we can sug­gest to clear your ir­reg­u­lar ex­pen­di­ture qual­i­fi­ca­tion is to ac­tu­ally go back and look at all your pro­cure­ment con­tract man­age­ment trans­ac­tions and make sure that you have sup­port­ing doc­u­men­ta­tion for all of them.

“We can­not de­ter­mine whether all ir­reg­u­lar ex­pen­di­ture was iden­ti­fied and dis­closed. Your re­spon­si­bil­ity is to go back to the en­tire pop­u­la­tion and make sure that every­thing that is ir­reg­u­lar is dis­closed.

“Then you have to fol­low the nec­es­sary pro­cesses in try­ing to ad­dress that ir­reg­u­lar ex­pen­di­ture – why it was in­curred and who was re­spon­si­ble and what ac­tion should the coun­cil take in terms of writ­ing it off or in­ves­ti­gat­ing to make sure that who­ever was re­spon­si­ble is charged with those trans­gres­sions.”

The mu­nic­i­pal­ity in­curred unau­tho­rised ex­pen­di­ture of R183.44-mil­lion as a re­sult of over­spend­ing the amount ap­pro­pri­ated for the bud­get and trea­sury of­fice, tech­ni­cal ser­vices and road­works votes in the mu­nic­i­pal­ity’s bud­get.

CHDM in­curred fruit­less and waste­ful ex­pen­di­ture of R887224 dur­ing the year due to in­ter­est on late pay­ments of R736542 and pay­ments in re­spect of ad­ver­tise­ments and costs in­curred in re­spect of can­celled ten­ders of R150 682.

Boettger said CHDM needed to look at the cause of over­spend­ing.

“Ir­reg­u­lar ex­pen­di­ture is not a good picture and the causes are lack of com­mit­ment, poor man­age­ment and poor per­for­mance.”

She said em­ploy­ees needed to take re­spon­si­bil­ity for their work, with con­sis­tent mon­i­tor­ing nec­es­sary.

Eng­cobo mu­nic­i­pal­ity was the only one to re­ceive a clean au­dit in the Chris Hani re­gion.

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