Note to editors: Please find attached English and Afrikaans soundbites by Cllr David Ross.
The Democratic Alliance (DA) in Nala Local Municipality warned of the impending lacklustre report from the Auditor General (A-G). Residents in Nala have been stunned by the staggering numbers of fruitless and wasteful, unauthorised and irregular expenditures.
The A-G implied that a culture of impunity exists in the public sector and that impunity cannot coexist with accountability. In September 2022, we called for an urgent investigation into the financial viability of the municipality and an investigation in terms of Section 106 of the Systems Act.
The A-G audit report for Nala vindicated the DA’s view, as the following was highlighted:
- The municipality recorded a material uncertainty as the municipality incurred a net loss of R164 million during the year ending 30 June 2022.
- The Annual Financial Statements and the annual performance report contained material misstatements due to inadequate reviews and lack of adequate oversight on the implementation of action plans.
- The internal control environment was deficient due to vacancies in key senior management positions and a lack of leadership.
- The failure to activate the accountability ecosystem namely an internal audit unit, audit committee and municipal public accounts committee to provide feedback to the mayor and speaker.
- Lack of improvement in compliance with legislation similar to non-compliance of previous years.
- Non-submission of the annual financial statements within the legislated time.
- Non- compliance with revenue and asset management.
- Unauthorised expenditure of R116, 6 million, irregular expenditure of R 6.5 million and fruitless and wasteful R24, 5 million expenditure.
- Lack of adequate controls in Supply chain management and deliberate noncompliance to MFMA, PPPF (framework) and PPR regulations.
- IT management at the municipality has an internal capacity problem and did not implement corrective measures to remediate the findings during the 2020-21 audit.
- Inadequate oversight over the operational management due to a lack of senior management supervision and technical guidance.
- Adequate systems and processes were not established and inadequate review and monitoring of quarterly performance reports by senior management are not timely identified and corrected.
The DA will call for a forensic investigation into supply chain management, irregular procurement, and contract management, as well as litigation costs on several issues.
The DA urges the MEC to investigate maladministration, fraud, corruption, or any other serious malpractice that has occurred or is occurring at the municipality to ensure that it fulfils its statutory obligations.
The DA in Nala will work towards accountability and consequences for those who transgress the legal prescripts of the MFMA and Local Government Regulations and will call on management and council to instil a culture of honesty, integrity, and hard work at the municipality.