The Kouga municipality has been awarded an unqualified audit by auditor-general Kimi Makwetu for its fifth consecutive year.
The municipality, however, failed to take reasonable steps to prevent irregular, fruitless and wasteful expenditure, Makwetu said in his report assessing the 2017/2018 financial year.
Commenting on matters which had no adverse effects on the audit outcome, Makwetu said the municipality had incurred water and electricity losses amounting to R15m and R21.7m, respectively.
This was a significant decrease from the previous financial year’s electricity and water losses, which were at R20.9m and R27.8m, respectively.
Kouga chief financial officer Selwyn Thys said the positive audit outcome could be attributed to the municipality’s strict tender-awarding processes and a zero tolerance approach towards political interference.
“The key issue here is the way you’re conducting your business and the way you conduct operations as a municipality. You must make sure that you are compliant in all the decisions that you take,” Thys said.
He said the municipality was particularly proud of significant strides made with the asset register and following procurement processes.
He said this could be attributed to the municipality physically verifying its assets.
“The [Nelson Mandela Bay] metro has two major issues, the asset register, and then the issue around procurement.
“We got a clean bill of health on procurement; there’s not a single audit finding on procurement, which is a significant achievement for any municipality,” Thys said.
He said Kouga followed a rigorous process to ensure that all tenders were fully compliant with supply chain regulations and were within the legal framework.
Thys said its target was to achieve a clean audit outcome in the next two years.
He said the municipality needed the political will and support to achieve the goal.
“The administration must make sure that we follow the law and the regulations in how we conduct our business.
“We need to instill that culture in the administration and understand that politicians want to do certain things or expect certain things, but my attitude as CFO is that everything must happen in line with the legal framework,” Thys said.
He said that he would not compromise on his stance regarding undue pressure from politicians.
“Sometimes you find that you are put under pressure to do certain things as administrators and when you get a bad audit outcomes you are nailed as officials,” Thys said.
Kouga mayor Horatio Hendricks said the minimal matters emphasised boded well for the municipality’s endeavours towards a clean audit.
“Despite our water and electricity losses being one of the matters emphasised by the AG, we were pleased to note that we were able to cut back on these losses during the year under review.
“This saved the municipality about R11m when compared to the previous financial year,” Hendricks said.
He said that there was room for improvement in the municipality’s performance management system and related controls.
“Kouga’s performance management system was basically non-existent when the new council came into power.
“While we have strengthened the system over the past two years, more needs to be done so as to ensure the processes for the collection, collation, verification and capturing of performance information to ensure valid, accurate and complete reporting against planned objectives are clearly defined,” Hendricks said.
“The 2017/2018 audit report is a big step in the right direction and will guide us when it comes to implementing further improvements to take Kouga to the top,” he said.