Clean audit for Mhlathuze Water Board
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Durban - THE Mhlathuze Water Board has fired allegedly corrupt officials, referred cases to the Special Investigating Unit (SIU) and managed to “turn the corner” to achieve an unqualified clean audit opinion, chief executive Mthokozisi Duze announced.
Duze, addressing a media briefing in Durban, said the challenges the water utility had focused on in its turn-around strategy included “issues around governance and lack of internal controls” following several qualified audit reports, and unqualified with material adjustment opinions from the Auditor-General South Africa (Agsa) since 2015.
“Mhlathuze Water, for the 2019/2020 financial year, and for the first time in at least four years, got a clean audit opinion from the auditorDuze said.
He added that it had been a long process as it had taken a few years to turn the organisation around.
“The 2016 audit uncovered irregular expenditure of almost R300 million, that had to be dealt with in terms of an investigation determining the causes of the irregular expenditure, dealing with consequence management, to recover revenue where we can and to refer investigations and cases to court,” he said.
However, he said following the investigation, the sum attributed to fruitless and wasteful expenditure was found to be “below R8m” of the suspected R300m.
“The matters are before the court as we speak. We have reported to the authorities, and others are being investigated by the SIU. The officials involved were consequence managed, and others had to be dismissed. Others were taken to the Labour Court,” he said.
Duze declined to comment on whether the utility had managed to recover the R2.3m allegedly siphoned out of its bank account while Dudu Myeni was chairperson of the board, which was brought to the fore in testimony by witness “Mr X” before the Zondo Commission of inquiry into state capture in February.
“The law will take its course. It is sub-judice,” Duze said.
He added that the state-owned entity (SOE) had strengthened its internal financial and policy controls to be able to detect and prevent fraud and corruption while holding officials accountable for their actions.
“We don’t have any appetite for corruption, and we don’t have any tolerance for wrongdoing. We have to change how SOEs are seen. They are not places for people to infest and engage in corruption. They are arms of government to deliver services to the people,” he said.
Duze said the utility was currently planning for the region’s future water needs, which included exploring groundwater resources and a proposal to build a water treatment plant to sell potable water to Swaziland.
Highlighting Mhlathuze Water’s financial performance, financial manager Thokozani Hlongwane said the utility had achieved a net revenue surplus in 2019/20 of R136.3m and a net profit margin of 23.95%, up from R103.9m and 20% respectively in 2018/19.
Hlongwane said the SOE had designed and implemented audit action plans to address the findings raised by Agsa, which had included the reconstruction of its fixed assets and irregular expenditure registers; the strengthening of internal financial controls and the hiring of skilled finance staff, such as chartered accountants.
The chairperson of the board, Thabi Shange, said it was pleased with the financial governance of the SOE which had attracted a team of “competent, committed and passionate” officials.