Parliament, Tuesday, 10 September 2019 – The Standing Committee on Public Accounts (Scopa) is concerned about the lack of consequences from almost all the municipalities that appeared before the committee today.
Today Scopa met with six municipalities who had failed to obtain a clean audit for three consecutive financial years. The committee wanted to understand from the municipalities what has led to the near collapse of financial management in these municipalities. These municipalities are Mogalakwena, Mopani District, Thabazimbi, Vhembe District, Joe Morolong and Phokwane municipalities.
Scopa found that despite the adverse and disclaimed findings and non-compliance to supply chain management processes at Mogalakwena Local Municipalitity, no one has faced any consequences on non-compliance. The committee was informed that at this municipality bid committees were constituted fraudulently as they took decisions to issue tenders despite the fact that there was often no quorum, which means those tenders were also issued fraudulently. It is concerning that the officials who were involved in this non-compliance are still at the municipality. Scopa has requested Mogalakwena to furnish the committee with a schedule of all matters that should be before the Municipal Public Account Committee (MPAC). The schedule should detail how many matters have been finalised, how many are still in progress, the nature and extent of investigations and the status of all the implicated people. Scopa has also flagged this municipality as one that the committee should visit in future to see for itself how the municipality is working.
When it came to Mopani District Municipality, the committee found that the municipality had adverse findings for four consecutive financial years. Similarly, to Mogalakwena, there has not been any consequence management despite non-compliance. Scopa has requested from the municipality, a breakdown of the R296 million that was given to Lepelle Northern Water. The committee was also informed that Mopani still owes R571 million to Lepelle Northern Water. Scopa has resolved to also adopt Mopani as one of its priority focus areas. The committee will monitor the municipality until it can function effectively.
Thabazimbi Local Municipality has similar problems as other municipalities which have led to the collapse of the financial management of the municipality. Scopa has requested a spreadsheet of all the issues that have led to this situation.
The committee found that when it came to Vhembe District Municipality, R18.5 million was paid to consultants in the 2017/18 financial year yet there were material misstatements that were identified from the annual financial statements which resulted in a disclaimer audit opinion. The Vhembe municipal council also took a decision to pay the former municipal Mayor almost R1 million even though the municipality lost R300 million that was invested in VBS under the leadership of the former Municipal Manager. The committee found this concerning as it depicts a lack of leadership in this municipality and will further investigate the matter with law enforcement agencies.
When the committee held hearings with Joe Morolong Local Municipality the same pattern as with the previous municipalities became apparent. Scopa was informed by the Auditor-General (AG) that at Joe Morolong the financial information was not accurate enough to perform a detailed assessment of the municipality’s financial health. The municipality did not collect debt from consumers which led to its inability to pay suppliers on time. Scopa has also noted that the municipality is stubbornly refusing to hand over financial documents to the auditors. This looks very suspicious to the committee, as it seems as if the municipality is hiding something.
Scopa had to reschedule the hearings with Phokwane Local Municipality as the municipality is under administration and the administrator was not present as he fell sick. The committee believes that it requires the administrator to answer on financial matters of the municipality.
Scopa has resolved to contact the Hawks and the Special Investigating Unit (SIU) to look at the options that exist, particularly when it comes to those municipalities where it is clear that there are cases to answer. Scopa has also requested the Department of Cooperative Governance and Traditional Affairs to provide a detailed report on how it plans to get closer and assist these municipalities. Scopa has requested that all reports and schedules should be submitted to the committee by Monday, 16 September 2019. The committee will continue with the hearings tomorrow with the rest of the twelve municipalities with similar problems.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF SCOPA, MR MKHULEKO HLENGWA.
For media enquiries, please contact the committee’s Media Officer:
Name: Ms Faith Ndenze
Parliamentary Communication Services
Tel: 021 403 8062
Cell: 081 377 0686
Email: fndenze@parliament.gov.za
Arrange a tour