Clean administration award for Ngwathe – spinning the truth?

Last week Gazette’s front page showed a pretty picture of Mayor Mochela holding the Clean Administration Award Ngwathe has just earned, apparently for its so-called “best audit opinion.” Can this be true? So I had to consult available public documents to uncover the true position.
Mr Steve Naale, the Municipal spokesperson (indicted by the Human Rights Council for racism remarks – still in his job, without any consequences) described the Award as “recognition for Ngwathe’s best audit opinion”
The Auditor General Report for 2014/15 indicated that the Municipality in the years from 2010 to 2014 received a disclaimer as an audit opinion whilst in the 2014/15 financial year the municipality received an Unqualified Audit Opinion with findings.  Therefore the 2014/15 Audit report was the best audit opinion compared to the previous years and this achievement made Mr Naale say “the Municipality, ANC Leadership, is effectively managing public funds while improving and accelerating service delivery”. How effective does the ANC manage public funds. Let us see what the Auditor General says in his 2014/15 audit report:
•Irregular expenditure of R35 million was incurred,
•A R375 million provision for impairment of debtors had to be made
•Material water and electricity losses of R310m (2014: R 156m) and R 156m (2014: R 56m) respectively occurred through incorrect and inconsistent billing
•Ngwathe incurred a net loss of R277m, so the Auditor-general stated his doubt that the municipality could meet its financial obligations as they fall due, and doubt that it would achieve its service delivery objectives and continue as a going concern
•The financial statement for the previous years were wrong and now had to be restated.
These findings certainly do not speak about Clean Administration. To me these findings indicate a poor performing Municipality whilst Mr. Naale wants to make us believe that the Municipality is performing well to the extent that it achieved a Clean Administration Award. The Annual Financial Statements speaks a story of its own on how well the Municipality and the ANC Leadership is doing and the results of the Annual Financial Statements is in direct opposition to the Clean Administration Award, that want to make us believe that everything is in order. As an example we quote the following figures:
•Operating Deficit over the past three years amounting to R 733 474 034
•Net assets decreased by R 1 010 963 264 over 3 yr. period
•Cash in the bank reduced by R 43 661 897 over past three years
•Trade Creditors increased from R 178 757 536 to R 479 719 467
•The total Employee cost remained very high and together with the remuneration of councillors has cost the Municipality R 189 818 621 per annum.
Despite the deterioration of the financial position of the Municipality the following officials has drawn the following remuneration:
•Municipal Manager – R 1 669 173,00
•CFO – R 833 160,00
•Executive Mayor – R 743 223,00
The above glimpse of the poor financial position of the municipality is in direct contrast to the Clean Administration Award that say all is well. The Auditor-General pointed out more reasons to worry:
•Strategic planning and performance management and related controls were inadequate
•Annual financial statements, performance and annual reports were not prepared as required by law. Financial statements were not submitted for auditing within two months after the end of the financial year
•Procurement and contract management was not monitored on a monthly basis
•Debts owed by the municipality was not always paid within 30 days or an agreed period,
•Leadership failed in many divisions and on many levels.
•Financial statements were not properly reviewed for completeness and accuracy prior to submission for auditing.
We fully agree with DA Councillor Arnold Schoonwinkel who congratulated Mayor Mochela on the award, but pointed out that Ngwathe had still not earned a “clean” auditor’s report, no matter what Mr Naale claimed, and that the annual report was very late and had cost a great deal more than it should have.
The public of Parys expects not only a clean audit report but improved financial management and controls so as to enhance service delivery to all its inhabitants. Right now we see little evidence of that, award or not.

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