|Corrections on the alleged irregular wasteful expenditure by the SDM
||18 Apr 2012
The Sedibeng District Municipality learnt with surprise and shock from the media in the recent few days about reports that it incurred irregular and/or wasteful expenditure amounting to R 88 million. This came during the recent visit by the National Council of Provinces (NCOP) to the Gauteng Province’s municipalities between 18th & 19th April 2012 at the Vereeniging Civic Theatre.
The purpose of the NCOP Provincial Week was among other to oversee and collect information on the progress that provinces and municipalities are making in delivering quality services to the people. It also affords NCOP delegates to undertake a joint oversight programme to ascertain the progress in advancing the government’s commitment to ensure a better quality of life for the people of South Africa.
It is imperative that the Sedibeng District Municipality clarify the misinterpretation of facts as presented in the media on this matter and indicate that this information may have been taken from our Audit Report without necessarily seeking clarity on it.
“It has and will still be our commitment to ensure good governance principles are adhered to by all at the Sedibeng District Municipality and our collective oversight responsibilities are always on alert and effective. Sedibeng has an effective internal controls in place and our communities need not to be worried”, said the Executive Mayor of the Sedibeng District Municipality: Councillor Mahole Simon Mofokeng
This matter was further clarified by the Executive Mayor of the Sedibeng District Municipality during the NCOP municipal engagements on the said dates.
First issue: As disclosed in note 36 to our Financial Statements, the Municipality incurred unauthorized expenditure of R 88,631,829 as a result of exceeding the budget amounts in employee cost and grant expenditure.
Remedial Steps & facts: A report was submitted to council and approval was obtained for this unavoidable and committed expenditure specific towards employee cost and in the main towards capital projects initiated in support and in assisting our Local Municipalities with capital projects towards a common service delivery imperative.
These projects once completed by the District are then transferred to the Local municipalities asset register upon completion and affects the Municipalities balance sheet from a going concern basis.
Our municipality has further proceeded to change the budget methodology in the 2011-2012 adjustment budget process to ensure that all projects and employee cost are curbed with effective and efficient internal control procedures to contain and manage the municipality’s expenditure.
Second Issues: As disclosed in note 36 to the financial statements, the municipality incurred fruitless and wasteful expenditure of R 140,000 because of an event that was organized which was not attended by the delegates.
Remedial Steps & facts: This matter was reported to the Audit Committee for condonation and noting. In addition based on Council policy the Accounting Officer and the Executive Mayor investigated the legitimacy of the case in point and duly condoned the transaction after receiving legal advice to ensure compliance in relation to an approved Council policy.
Both transactions in question have been reported and accepted by the Audit Committee and the Municipal Public Accounts Committee.
On the 16th July 2009, the Sedibeng District Municipality was bestowed with the “Ambassador of Operation Clean Audit” by the Minister for Co-operative Governance & Traditional Affairs. This award came after the Sedibeng District Municipality being one of the only three municipalities which received clean audits at local government level at that time.
As an Ambassador of the Programme, the Sedibeng District Municipality continues lend their knowledge and expertise on best audit practices to their less fortunate counterparts, through compiling and documenting their internal control and risk management processes.
Operation Clean Audit is being rolled out nationwide and filtered down to local governments through the provincial governments’ portals. The programme aims to address all issues raised by the Auditor-General and reduce government’s vulnerability to risk within provincial departments and municipalities as highlighted in audit reports. This will be done through projects targeting issues central to the sustainability of sound financial management, accountability and best practices. It is COGTA’s goal to assist all municipalities and provincial departments to achieve clean audit opinions by 2014, improve and sustain the quality of financial statements.
This Award is very important to the District Municipality as it is a tool used to showcase our sound financial standing to our potential investors and importantly, our communities.