The municipality is legally compelled to prepare an Annual Report which accurately reflects the performance of the institution in the critical areas of service delivery, as well as the financial performance of the municipality.
The draft Annual Report of the Nelson Mandela Bay Municipality was tabled in council on 24 January 2013, before being referred to the Municipal Public Accounts Committee (MPAC) for review and the drafting of the Annual Oversight Report.
The DA regrettably has noted a significant increase in areas of non-compliance, which has culminated in the qualified audit opinion by the Auditor General for the period under review.
The matters of concern noted, include repeat mentions of many existing areas of concern in the Audit Report of the Auditor General.
Critical areas of concern raised in the AG’s audit report include:
- Significant legal uncertainties – the metro is currently the defendant in a significant number of lawsuits to the value of R100 million;
- Unauthorized expenditure amounting to R318,7 million was incurred due to overspending against vote numbers of approved budgets;
- An additional R234 million in irregular expenditure was incurred as a result of contraventions of Supply Chain Management procedures and processes;
- Fruitless and wasteful expenditure amounting to R4,5 million was incurred due to breaches of contractual agreements;
- Bad debt expenditure amounted to R251 million due to bad debt write-off’s and provision for doubtful debts;
- An impairment expense of R93 million was incurred against the ‘new billing system’, which was abandoned before it could be implemented;
- Water losses of 19 272 megalitres (19 272 million liters) with a rand value of R127,2 million were incurred during the financial year. This loss equates to roughly one fifth of our total water consumption as a metro;
- The metro once again underspent on its Capital Budget by R137,7 million;
- The Auditor General raised no fewer than twenty areas of concern specifically related to supply chain management, procurement and contract management.
In addition to the areas of concern raised by the Auditor General, the Municipal Public Accounts Committee identified the following areas of concern:
- 40% of all Key Performance Indicators and targets were not met during the period under review;
- An approved system of Delegation of Powers was not in place during the audit period;
- The use of the bucket system continues with over 23 000 buckets still in use. This figure is for serviced buckets only and excludes all unknown and unserviced buckets. If one were to include unserviced buckets, this figure would escalate to in excess of 30 000. Sadly no meaningful progress has been made in this area in spite of promises made by the mayor to eradicate the bucket system;
- The positions of Municipal/City Manager and the senior management team of Executive Directors remained vacant during the 2011/12 financial year. This has had an extremely detrimental effect on the smooth running of the metro;
- The continued high number of vacancies in all departments, particularly critical vacancies within the essential services of water, electricity and fire and safety have had a direct impact on service delivery and infrastructure within the metro;
- The non-sitting of the Mayoral Committee due to political differences has led to unacceptable delays in land planning applications being processed and the consequent negative effect this has on the city economy, costing jobs and opportunities instead of creating them;
- The declining state of our ageing city infrastructure and poor maintenance has resulted in frequent disruption of essential services to all communities;
- The high price of electricity is of serious concern as it has had an extremely detrimental effect on both consumers and the business community;
- Continued electricity theft remains at an unacceptably high level;
- The continued and unabated illegal dumping throughout the metro cuts across all communities.
To address the many concerns, MPAC has recommended that the City Manager submit an action plan reflecting remedial action to address the qualified audit opinion as well as the matters of emphasis raised by the AG and by the MPAC.
It is absolutely imperative that these matters be dealt with on an urgent basis so that the R1 billion plus that has been lost by this institution could be better spent on essential service delivery, the eradication of the bucket system and the desperately needed upgrading and maintenance of our crumbling infrastructure.
Cllr Dean Biddulph
