DA slams Makana’s 2020 audit report

Issued by Kevin Mileham, MP – Frontier Constituency Leader
14 Jun 2021 in Press Statements

For the second consecutive year, the Auditor General has been unable to express an opinion on the state of the Makana Municipality’s finances. The blame for this must be laid firmly at the feet of the governing ANC and the municipal manager.

Among the issues identified by the Auditor General as the basis for his disclaimer are the following:

  • Insufficient audit evidence for property, plant and equipment;
  • No supporting evidence for work-in-progress expenditure;
  • Failure to properly account for investment property;
  • Lack of supporting documentation to prove ownership of investment property;
  • Insufficient audit evidence that employee benefit obligations were properly presented and disclosed;
  • Failure to bill all revenue from service charges.

Although Irregular Expenditure was stated in the municipal financial statements at R339,8 million (up from R299,2 million the prior year), there was insufficient audit evidence to determine the veracity thereof. A similar situation presented with Unauthorised Expenditure, reported at R577,4 million (up from R556,9 million). Fruitless and Wasteful Expenditure was reported at R28,7 million (up from R26,4 million in the prior year).

The Auditor General was also unable to express an opinion on the municipality’s performance report, due to inadequate performance indicators and a lack of proper performance management systems and processes. This aligns with the findings of Parliament’s Standing Committee on Public Accounts, which noted the complete lack of performance management agreements with senior staff.

The Democratic Alliance (DA) has long called for national and provincial intervention in Makana. As far back as 2013, we called for a Municipal Financial Recovery Plan to be put in place in terms of s139 of the Constitution. It is our considered opinion that the Provincial Executive of the Eastern Cape and various national Ministers of Cooperative Governance and Traditional Affairs have been constitutionally delinquent in not placing the municipality under administration, and more recently dissolving it as ordered by the Grahamstown High Court. It was only last week that a detailed Financial Recovery Plan was eventually published by the Eastern Cape Provincial Executive. The true test of this plan, however, will be in the implementation and we believe it is unlikely to achieve its objectives under the current management.

The Makana Municipality continues to suffer under weak ANC leadership and a completely dysfunctional municipal administration, starting from the very top with the municipal manager, who should have been dismissed for gross mismanagement years ago. Real change can only be brought about by voting out the corrupt and incompetent ANC and letting the DA bring about change. We have demonstrated that where we govern, we get things done, and this can be true of Makana as well.