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AG report still in the spotlight

The dust has still not settled after the shock release of the annual auditor-general’s (AG) report, which also found that the Drakenstein Municipality doesn’t meet the AG’s standards.

The office found that Drakenstein Municipality flouted a number of procurement regulations that led to its incurring irregular expenditure to the tune of almost R46 million in the 2017-18 financial year. This is the first time in 11 years Drakenstein has not received a clean bill of financial health.

The municipality, however, states categorically that it does not agree with the non-compliance opinion of the Auditor-General, and that no irregularities have taken place. In fact, if anything, it has saved ratepayers some money.

But the ANC-led opposition claims the municipality’s irregular procurement process led to irregular expenditure amounting to R46 299 919.00. The party has posed the question “Why was the current contractor favoured and can we follow the money?”

Says local leader of the opposition Moutie Richards: “When Drakenstein Municipality was queried by the AG’s office about the irregular procurement process followed during the appointment of the contractor responsible for construction work on the Paarl Waste Water Treatment Works the excuse was that the municipality hasn’t suffered any financial losses. But the question is, why be silent about engaging in unfair and uncompetitive procurement processes?

“The AG’s office came out strongly in its final report that the municipality’s financial management has regressed tremendously – from a clean audit in the previous financial year to an unqualified audit now – so can we, then, ask the question, what is the real state of finances of Drakenstein Municipality? We as the official opposition have continuously raised and highlighted the deterioration of the financial affairs of the municipality.”

Richards claims the municipality has over the last three to four years under-performed by not meeting its operating revenue targets and under-spending the operating budget by more than 10%. He said the municipality has a history of under-spending the capital budget at an average of 65%, and rolling over projects to the value of ±R200 million per annum, particularly over the last three years.

“The municipality normally declares capital budget spending of close to 100%,” Richards said, “but this is calculated after the original budget has been adjusted and large amounts of funds are rolled-over to the next financial year.

“This gives the false impression that all the funds are being spent in the same year.

“The municipality’s over reliance on external loans over the last few years has put a strain on its financial viability because, contrary to what it’s telling the public, these loans are not generating the required revenue.

“Through these poor financial management decisions the DA-led municipality has placed an extra burden on already overstretched ratepayers with the higher than inflation year on year increases.”

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