The Nelson Mandela Bay municipality’s records are in such a mess that the auditorgeneral could not prove which land actually belongs to the municipality.
The city also does not have a proper handle on managing its prepaid electricity meters.
These are some of the reasons why it received yet another qualified audit for the 2017/2018 financial year.
This was the municipality’s seventh consecutive qualified audit outcome.
Despite acting city manager Peter Neilson commenting in December that some improvement had been evident, the AG’s report paints a gloomy picture of the state of the Bay’s administration.
The report was made public on Wednesday.
In the period under review, the municipality was governed by the DA and coalition partners the ACDP and COPE and, for some of the time, by the UDM and Patriotic Alliance.
The AG in his report also flagged incorrect billing as a problem in the municipality.
Commenting on matters that had no bearing on the audit outcome but were flagged as major concerns, the AG said the municipality had lost 41% of its water for the year, costing the municipality R152.9m in lost revenue.
This is largely due to leaks and faulty meters, or houses without meters.
Faulty electricity meters, illegal connections, theft and meter-tampering cost the metro R339.5m in revenue.
On Wednesday, Neilson said the city simply had no working plan in place to deal with water and electricity losses.
“The management of the water and electricity losses is unquestionably something that we are not doing correctly. The strategy that we have used is clearly not working,” he said.
Neilson said the combined physical and non-revenue water losses, which amounted to more than 40%, were simply unacceptable to the AG.
“There is not much we can do with technical losses. It seems to me that whatever strategy we apply is only temporary and we make a difference for a day, a week or a month, and then we revert to back to where we were.
“Our culture and how we do our business has to change – we are not taking enough accountability to ensure that the strategies make a difference.”
Neilson warned that if the city continued with strategies that did not work, it would affect revenue.
“If we don’t change this, two things are going to happen – we’re going to have an unfunded budget while our revenues drop and our expenses increase and then we will have a qualified audit continuously.”
Neilson said the plan was to use R750m in loan funding to turn things around, and to prioritise increasing revenue.
“These are the things that we have to do now. Individuals involved in water and electricity have to take accountability and we have to introduce performance management.
“We are going to have to manage this on a month-tomonth basis and not wait until the end of the financial year.”
Meanwhile, other matters highlighted by the AG include:
● The city did not bill for and record all revenue owed to it for services. This led to an understatement in its books of R85m related to services rendered to poor households;
● It did not have proper systems in place to identify and record all irregular expenditure incurred from contravening supply chain processes;
● The city could not verify the lifespan of some of its assets – vehicles and equipment – and its records did not reflect all its land and buildings; and
● The municipality disclosed unauthorised expenditure of R260.2m while it had accumulated fruitless and wasteful expenditure to the tune of R659.2m from previous years.