Underspending of grants and poor debt collection should have served as warning signs of the current state of Makana Municipality's finances, a new report states.
Underspending of grants and poor debt collection should have served as warning signs of the current state of Makana Municipality's finances, a new report states.
The Municipal Public Accounts Committee (MPAC) has submitted a damaging report which showed non-improvement in the way Makana Municipality handles its books. MPAC Chair, Julia Wells, wrote a report to council regarding the committee's conclusions after their review of the 2012/13 Annual Report last month.
Wells said poor spending of grants, failure of debt collection and spending of municipal reserves should have been taken as warnings that could lead to financial failures.
The report was tabled in council last week, together with the Auditor General's report,
She said during its review of the Annual Report the committee noticed that the municipality was poor in spending on conditional grants. "Poor performance in spending conditional grants, while using municipal reserves and failing to collect debts owed to the municipality should have been taken more seriously as indicators of a growing financial crisis," Wells told council.
She said the Annual Report has not given them (the committee) any indication as to why Makana ended up in such a crisis. "The 2012/13 Annual Report cannot provide all the answers as to what caused such serious challenges, but significant trends were evident. For one, our monitoring tools are often too vague and not specific enough, making it hard to capture a true reflection of what actually happened to measure performance of staff," said Wells.
Wells said although there are control systems in place, they are not implemented. "We note that control systems exist, but are not being fully used," she said.
Makana Municipality failed to submit the 2012/23 Annual Financial Statements in time, which resulted in the MPAC failing to produce their oversight report earlier, in compliance with the legislation.
Makana received a disclaimer of opinion in the draft Auditor General's report for 2012/13 financial year.
Councillor Paul Notyawa said he was worried that in the past three years Councillors have been denied the notes to financial statements.
"It is difficult to do follow-ups because we have been denied information [which could assist us to]deal with whoever the culprit is; the public paints us all with [the same brush]while the rotten apple among us smiles," said Notyawa during the meeting.
