Problems facing metro outlined
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 January 24, 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 (AG) for the period under review.
Critical areas of concern raised in the AG's audit report included:
Significant legal uncertainties – the metro is currently the defendant in a significant number of lawsuits to the value of R100-million.
Unauthorised expenditure amounting to R318.7-million was incurred due to overspending.
An additional R234-million in irregular expenditure was incurred as a result of contraventions of supply chain management procedures.
Fruitless and wasteful expenditure amounting to R4.5-million was incurred due to breaches of contractual agreements.
Bad debt expenditure amounted to R251-million.
An impairment expense of R93-million was incurred against the "new billing system", which was abandoned before it could be implemented.
Water losses of 19272 megalitres (19272 million litres), 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 underspent on its capital budget by R137.7-million.
The AG raised no fewer than 20 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:
During the period under review, 40% of key performance indicators and targets were not met.
An approved system of delegation of powers was not in place during the audit period.
The use of the bucket system continues, with more than 23000 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 30000. 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 manager and the senior management team of executive directors remained vacant during the 2011/12 financial year. This 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, had a direct impact on service delivery and infrastructure within the metro.
The non-sitting of the mayoral committee due to political differences led to unacceptable delays in land-planning applications being processed, and the consequent negative effect this had on the city economy, costing jobs and opportunities instead of creating them.
The declining state of our ageing city infrastructure and poor maintenance 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 municipal manager submit an action plan reflecting remedial action to address the qualified audit opinion as well as the matters emphasised by the AG and by the MPAC.
It is 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.