The Auditor-General of South Africa (AGSA) has raised concerns about the performance of the eThekwini Municipality and found that the metro did not achieve 25% of its planned targets.
This shortcoming was in the delivery of critical services such as water, housing and electricity. This had triggered community protests.
Auditor-general Tsakani Maluleke recently tabled an audit outcome of municipalities for the 2022/23 financial year. It revealed that the local government sector in the country was battling to deliver on its mandate.
The report highlighted positives for the the eThekwini Metro including that it had achieved an unqualified audit opinion, similar to what was achieved in previous audits. It is the second highest audit opinion next to a clean audit.
While the audit outcomes showed that the eThekwini Municipality remains strong, the AGSA has raised concerns about its performance, its failure to fully spend key grants, irregular expenditure and the downgrading of the municipality by ratings agencies.
In performance reports, the AG found that eThekwini Metro did not achieve 25% of its planned targets, including those related to water, low-cost housing and electricity. It said this led to service delivery protests in certain areas of the metro.
The audit raised concerns on the City's spending of the Public Transport Network Infrastructure grant, finding that the metro spent about 40%.
It raised concern about irregular expenditure incurred by municipalities and found that the metro had incurred R2.41billion in irregular expenditure.
“While supply chain management remains a challenge at the metro, it has improved its record-management processes and plans to automate supply chain management processes to reduce human error and possible fraud,” the report said.
It also highlighted concerns about credit-rating agencies, saying eThekwini had its credit ratings downgraded by at least one of the rating agencies.
The AG also highlighted eThekwini’s payments from May 2018 to January 2020 for investigative services, without evidence that the services had been received. This resulted in an estimated financial loss of R21.01million.
“We notified the accounting officer of the material irregularity in November 2021. The accounting officer has initiated action to recover the financial loss from both the supplier and the former accounting officer who had resigned during June 2021,” it said.
Municipal spokesperson Gugu Sisilana said the positive aspects of the audit include that the City received an unqualified audit opinion.
She said the City was working to address the concerns raised by the AG’s findings.
She said the performance, monitoring and evaluations unit was working with management and officials of the units to verify results reported and supporting documentation evidence to prevent future findings.
“A detailed turnaround strategy for water and sanitation has been developed by the City and submitted to the National Treasury. This includes a water loss strategy,” she said.
On the matter of irregular expenditure, she said this was because procedures were not followed, not that there was no value for money. “There is an unauthorised, irregular, fruitless and wasteful expenditure reduction strategy in place.”
On the City’s credit ratings, she said, the municipality’s credit rating “remains one of the best among the metros in the country and is at an investment grade rating”.
“eThekwini is committed to a turnaround strategy focusing on infrastructure investments, financial reforms, and enhanced governance to restore stability and improve services.
DA councillor Thabani Mthethwa said it was unacceptable that eThekwini continued to face the issue of irregular expenditure.
“That such a big municipality is struggling to meet its performance targets, and failed to meet even half of those targets, is a serious concern, and the city manager ought to deal with those who are not performing.”
The Mercury