Makana Municipality has been listed as one of the 66 municipalities in financial distress around the country, according to a National Treasury report tabled at a council meeting on Wednesday.
Makana Municipality has been listed as one of the 66 municipalities in financial distress around the country, according to a National Treasury report tabled at a council meeting on Wednesday.
The report states that these findings are confirmed by the 2011/12 budget benchmark exercise conducted in May last year. To make matters worse, Makana also received a disclaimer report in the Audit Outcomes of the 2009/10 financial year.
When a municipality receives a ‘Disclaimer of Opinion’ it means that the Auditor-General is unable to express an opinion on the financial statements in their entirety, because the accounting records were not sufficiently completed. A disclaimer is therefore a serious indictment of a municipality's finances.
The report noted that “there is growing public awareness of the financial problems in municipalities. This is partly as a result of greater media coverage."
At the council meeting, Councillor Brian Fargher of the DA said the report was an indication that the eyes of state are on the municipality and that action should be taken. "We are a crisis municipality… we have a serious problem," he said.
In response, Executive Mayor Zamuxolo Peter said they have taken note but a "comprehensive report must come back with Auditor General regarding the issue."
Municipal Manager, Ntombi Baart said that there are number of discrepancies in the mid year performance assessment and budget adjustment report which was tabled to the council. She said it needed to be verified and calculated.
"With limited financial expertise, there have been serious challenges," she said, adding that these need to be addressed in order to have a credible budget.
"National Treasury has identified us as a municipality in financial distress. Not that we don’t have the capacity or potential to sustain ourselves,” she said, but that it has to do with the discrepancies in the financial statements.
