Durban - A report by the Office of the Auditor-General has painted a grim picture of the state of affairs at Ugu District Municipality and expresses doubts about the municipality’s ability to continue to operate.
While tabling her report on the municipality, Auditor-General Tsakani Maluleke said the South Coast municipality was a “going concern uncertainty (doubt about ability to continue operating)”. Her report details a string of problems, including high vacancy rates, even in critical positions at senior management level.
Ugu spokesperson France Zama said the municipality was in the process of addressing many of the challenges raised by the A-G.
The 2020/21 audit revealed that the municipality had been without a full-time municipal manager and a chief financial officer (CFO).
These positions are by far the most important in driving the municipality’s agenda forward and ensuring that it delivers on its mandate.
The position of municipal manager is still vacant, while the CFO position was filled two months ago. The report revealed that the municipality has a vacancy rate of 32% and 22% was at senior management level.
Ugu has achieved a qualified audit opinion for the past three years.
The report revealed that Ugu is one of the municipalities that had failed to produce credible financial statements.
On the financial system, the report found that 57% of municipal debtors were not recoverable, and that next year’s budget would pay for expenditure of the previous year(s).
In this financial year, the A-G revealed the municipality had suffered water losses to the value of R110m.
On the positive side, the A-G found that the municipality had a council in place and there was no instability at that level; it was not in debt to Eskom and its year-end bank accounts were not in overdraft.
The opposition in council said they agreed with the view that if Ugu had been a business, it would have collapsed.
DA councillor Leonard Ngcobo said the municipality had no money.
“If for one reason or other national Treasury withheld grants or equitable share, we would have to close shop and go home. If a portion of the 10% of the customer base that pays for services does not pay, the workers’ salaries would not be paid for that month. If this was a private company, it would have been closed down by now,” he said.
IFP councillor Sfundo Ngwane said “at the end of the month, we pray there is money to pay the employees”.
Zama said: “Having noted the auditor-general’s comments, the leadership collective of the municipality led by mayor Phumlile Mthiyane has reaffirmed our commitment to improving the quality of audit outcomes and that the filling of critical vacancies will be prioritised.
“In preparation for the clean audit outcome for the next financial year, a consolidated Audit Corrective Action Plan with time frames has been developed by the municipality which seeks to address and clear all the issues raised by the auditor-general’s report.
“And I must mention that almost 80% of those issues raised have already been addressed,” he said.