By Luvuyo Mjekula
Irregular expenditure, slow revenue collection, lack of consequence management and abdication of responsibility by senior officials.
These are just some of the “own goals” that have landed the Makana Municipality in the “financial crisis” it finds itself in.
These were the findings of the Makana Municipality Audit and Performance Committee in its second quarter audit report tabled by chairperson Misile Kenneth Mafani during Wednesday’s ordinary council meeting in the City Hall.
The committee reported that the National Treasury is currently reviewing the municipality’s financial recovery plan (FRP), and this will assist in tracking the municipality’s position in terms of the plan. The committee noted that the FRP’s impact is minimal as the municipality “is still in financial crisis”.
Mafani said the committee concluded that the FRP should be a standard item on the audit committee’s agenda, with a summary of progress the municipality has made regarding targets set in the plan.
Mafani told the meeting that the committee was concerned about the municipality’s slow revenue collection, which currently stands at 61%.
The closure of the municipality’s traffic services was a serious concern for the committee, as this might be impacting the poor revenue generation, considering it is “an easy way of making money”.
Mafani said, “We are also concerned regarding the staff that is supposed to be working in that section, and there is no clear plan on where they are currently situated.” He asked questions about what work the workers were currently doing and whether their remuneration remained the same, even though some may be doing less work than what they had been hired to do.
Mafani said the committee has recommended that the council follow up on the performance of the traffic services, together with the current services that are being done, whilst the section is closed.
Grocott’s Mail reported that the traffic department was closed in November last year after the Employment and Labour Department prohibited its use as it was found unsafe for workers. The closure has dealt a massive blow to Makhanda residents, who must travel to Port Alfred to obtain their traffic services.
After reviewing reports of unauthorised, irregular, fruitless and wasteful expenditure, the committee noted write-offs of R1.1m for fruitless and wasteful expenditure and R14.5m for irregular expenditure. “The committee is concerned that the contracts causing irregular expenditure to the municipality have not yet been finalised in terms of appointment of the service providers,” Mafani stated.
The committee was also worried about the amount for deviations – more than R11.6m for the four quarters of the financial year. “The municipality also still has contracts that are currently under irregular expenditure, but the processes of appointing are not yet finalised.”
Other problems flagged by the audit committee included the following:
- Debt book – monies owed to the municipality by businesses and government departments
- Accounts owed by councillors and municipal employees
- Appointment of the director of engineering services
- Slow implementation of risk action plans
On the positive side, the committee was pleased that overtime payments had been reduced compared to the previous financial years. “We are also pleased with the reduction in the fruitless and wasteful expenditure.”
The committee was also happy that critical vacant positions had been filled within the Budget and Treasury office. However, the municipality was implored to expedite the appointment of the director of Engineering Services, as this directly affects the municipality’s service delivery.
The auditors also applauded the municipality for the progress made with grant spending. As of 31 March 2025, the spending was reflected as follows:
- Municipal Infrastruture Grant – 85%
- Water Services Infrastructure Grant – 68%
- Office of the Premeir Grant – 100%
- Municipal Disaster Relief – 100%
- Own Revenue – 34%
The committee also announced several observations it made, including the following:
- There must be deliberate and consistent accountability by all those in the municipality’s payroll.
- General labourers are to be fully accountable for their daily responsibilities.
- Supervisors at any given time during working hours should know where and what those under their stewardship are doing.
- Managers are to provide necessary support and resources to execute the expected daily deliverables of their respective business units.
- Directors must be accountable for their respective directorates’ smooth running and provide support where necessary.
- The municipal manager/accounting officer is to provide leadership and direction of the municipality as mandated by the MFMA and other guiding and regulatory prescripts.
The primary purpose of the audit committee is to assist the Makana Municipality council in fulfilling its oversight responsibilities to ensure that the municipality has and maintains effective, efficient and transparent systems of financial management, risk management, governance and internal control processes.
