Shoddy bookkeeping, noncompliance in human resources and a general lack of consequence management for suppliers who are also government employees is what led to the Mandela Bay Development Agency’s regression from a clean audit to an unqualified audit with findings for the 2016/17 financial year.
This was according to MBDA financial manager Zimbali Khwela.
Khwela was presenting the reasons behind auditor-general (AG) Kimi Makwetu’s audit finding for the 2016/17 financial year to the municipal public accounts committee on Tuesday last week.
Khwela said the finding could also be attributed to outdated policies and procedures as well as poor midterm reporting.
The MBDA hopes to regain its clean audit status with a plan that includes regular submission of financial statements with no material findings.
Material findings in an audit report indicate significant errors or risks in the company’s financial information.
Khwela said the absorption of staff at the Nelson Mandela Bay Stadium meant human resources processes had to be flouted.
“When we had taken over the stadium, we had to absorb the staff at the stadium who were previously employed by Axxess,” Khwela said.
“The fact is we had to deviate from HR policies to facilitate that in the short term.
“At the moment, we have just concluded the in-sourcing of staff at the stadium.”
To solve this, Khwela said the MBDA would ensure that going forward it was HR-compliant. Khwela said that policies were also in the process of being reviewed.
The HR policy has already been reviewed and approved by the board. This meant negative AG findings could be avoided in the future.
Khwela said manual systems at the MBDA were also to blame for the regression.
“The IT system that we use was not integrated, which meant the reporting resulted in errors,” Khwela said.
To deal with suppliers who were doing business with the state, Khwela said the agency’s plan included checking at yearend that everything that needed to be disclosed had been disclosed.
“We are not allowed to appoint people who are in the service of the state and as part of billing documents people are expected to make declarations but at times you find that those declarations aren’t there, which makes it difficult for us.
“There were also findings related to the lack of consequence management where suppliers were in the service of the state.
“This is a particularly difficult thing to manage.
“In the year that has just passed we have been managing this better and we hope to manage it better going forward,” Khwela said.
Councillors in the committee applauded the MBDA for putting together the presentation.
ANC councillor Ncediso Captain said the presentation showed that there was a plan to get the MBDA back on track.
“We appreciate that there is progress and a clear plan in terms of where the MBDA is going.”
Captain said he would have hoped to receive feedback on how the stadium was benefiting the city’s coffers.
ANC councillor Buyelwa Mafaya reiterated Captain’s sentiments.
“We can see that there is progress and we can see this with the stadium when we go there,” Mafaya said.
“I also want to applaud you for your forward thinking. You are always one step ahead and you always anticipate something before it happens and prepare,” Mafaya said.