Mystery of missing R25m drought relief puzzles auditor-general
No records to show how Dr Beyers Naudé municipality spent grant
The troubled Dr Beyers Naudé municipality, which was awarded R30m in drought relief funding during the 2018/2019 financial year, cannot account for more than R25m of the grant.
This is according to auditorgeneral (AG) Kimi Makwetu, who revealed on Wednesday that the money was not spent on anything related to drought relief during that period.
Makwetu said he was also left wondering what the money was spent on because no records had been kept by the municipality for the period under review.
The drought-stricken GraaffReinet-based local authority was supposed to use the money on drought relief programmes.
“An amount of R5m was spent, and R25m was recorded as an unspent conditional grant in the financial statements.
“This amount was not cashbacked as the municipality did not have cash reserves of R25m in their bank account.
“This means that the unspent grant money was spent on expenses not relating to the drought relief,” Makwetu said.
“The municipality applied for a rollover of the grant even though the money had been spent.
“Due to the poor state of record keeping, we could not confirm on what the grant money had been spent.”
Furthermore, Makwetu added, the municipality had no evidence of the reported service delivery performance relating to water services.
Attempts to get comment from mayor Deon de Vos were unsuccessful at the time of writing on Thursday.
Makwetu, however, painted a bleak picture about the future of the municipality, which has struggled since its inception in 2016, when it was formed by the merger of the Camdeboo, Ikwezi and Baviaans municipalities.
Makwetu said the cashstrapped municipality was “under increasing financial pressure” and had realised net losses since its inception.
“For the year under review, expenditure exceeded revenue by R101m, indicating that the municipality may struggle to continue with remunerations and deliver services in the future.
“The equitable share grant funding for the year amounted to R83m. This was, however, not enough to cover the salary [costs of] R169m.
“This means that the cash collected from consumers and service charges [R139m] had to be used to first cover this shortfall, for the costs associated with delivering these services, for example paying Eskom, which at R89m accounted for the majority of the municipality’s payables,” he noted.
The municipality, Makwetu said, had disclosed that 74% of people who were charged for services amounting to R47m, might never pay the amounts due, and as a result the municipality was unable to pay creditors on time.
“It should be noted that it was difficult to determine the full extent of the issues at the municipality as the documents presented could not support the amounts disclosed.”
Management, Makwetu said, did not implement adequate financial disciplines, while supervisory reviews and monthly reconciliations were not taking place and document management was lacking, resulting in evidence not being available to support the figures in the financial statements.
“Additionally, the internal audit unit was not fully capacitated, with the result that they could not complete all their planned audits for the year, which included the review of the financial statements and the relevant supporting schedules,” Makwetu said.
The municipality is one of eight in the province that obtained disclaimers for the 2018/19 assessments.
Makwetu also expressed concern about poor administration and lack of leadership as a result of unfilled vacancies in a number of councils, including Chris Hani and Makana.
An amount of R5m was spent, and R25m was recorded as an unspent conditional grant in the financial statements. This amount was not cash-backed