Pretoria - Polokwane Municipality has blamed the difference in interpretation of the “general recognised account practice” (Grap) standards for the fourth qualified opinion as announced by the auditor-general, Tsakani Maluleke, earlier this month.
In her report, Maluleke found, among others, that the municipality irregularly spent R462 089 517 and that statements were not prepared in all material respects in accordance with section 122 (1) of the Municipal Financial Management Act (MFMA).
This placed the Limpopo capital municipality among 66 municipalities who have received qualified opinions across the country in the 2019/2020 financial year.
Responding to questions from the Pretoria News, municipal spokesperson Matshidiso Mothapo said the municipality had received a qualified audit report based on the difference in interpretation of Grap standards, and was not based on any form of institutional mismanagement in the organisation.
“The executive mayor (Thembi Nkadimeng) has been very hands on with the audit process, which resulted in several engagements with the AG on these matters. This is on how we differed with interpretation of certain Grap standards in about three areas.
“For instance, in one area there was an interpretation gap between the municipality and AG on the re-evaluation of assets. For the past five years the municipality has been using the same methodology to assess the useful life of its assets during the compilation of its financial statements. This has never been a basis of qualification for the past five years by the AG. However, now the AG has identified that the municipality’s application of the accounting standard is not proper,” Mothapo said.
He said the other area was on property and equipment, which was also based on differences of interpretation on the Grap standards.
“Several engagements were held with the auditors and management including the executive mayor, MMC of Finance (Charles Molepo) and the audit committee in the interpretation issues on assets.
“The issues raised in the 2019/20 financial year were all non-recurring findings mainly relating to judgments as required by Grap 17 on assets.”
Mothapo added: “The municipality was also audited on material irregularity in procuring PPEs for Covid-19, and the AG did not find any material irregularities in this regard. In the past the recurring issue was on items like revenue estimates, and we have since resolved the issue by installing a new financial system in 2019 and managed to solve a three-year recurring audit issue.”
Efforts to get hold of the AG’s spokesperson, Africa Bosso, were fruitless.
Polokwane mayor Thembi Nkadimeng came under fire following the release of the municipal audit outcomes.
The EFF in the province called for the ANC to fire Nkadimeng for “consistent failure to do oversight, failure to provide political leadership and manage the municipality”.
The DA’s concern was the lack of a proper filing system at the municipality that led to the qualified audit opinion. The Freedom Front Plus said they would continue to put pressure on the municipality to compel it to implement a policy for supply chain management.
Some of the measures municipality officials claim include the establishment of a compliance unit to ensure all supply chain management procurements are in line with regulations and the MFMA.
Pretoria News