By Rod Amner
The Auditor General’s 2023/24 report showed that the serially delinquent Makana Municipality is one of the seven worst-run municipalities in the country.
Makana has now racked up six consecutive disclaimed audit opinions, placing it in the bottom 2.7% of the 257 municipalities in South Africa.
A disclaimer audit opinion means that the AG could not find sufficient evidence for most of the information in the financial statements.
Released on 28 May, the national AG report showed that Makana’s irregular expenditure for the 2023/24 financial year amounted to R359.2 million.
‘Active harm’
The AG concluded that Makana Municipality had “actively harmed” residents through its “actions and inaction”.
“The lack of transparency in how municipalities [like Makana]use public funds and deliver services significantly weakens accountability,” the AG said.
Along with several other municipalities, Makana had not been properly accounting for funds and had been making decisions based on unreliable financial and performance information, the report stated.
The AG required Makana to disclose in its financial statements that there was significant doubt about its ability to continue operating based on its financial position. The lack of records and credible financial reporting resulted in Makana being classified as “financially distressed”.
Material irregularities (MI) notifications
The AG issued a ‘material irregularities’ (MI) notification to Makana on the lack of full and proper records, which, in its view, caused the poor financial state in which Makana finds itself.
While Makana has a financial recovery plan, the AG said the mayor, council and provincial treasuries do not effectively monitor its implementation.
The AG also issued two MI notifications to Makana on harm to the public due to environmental pollution caused by:
- The poor state of wastewater treatment works, including the specific “failure to prevent pollution of a water resource at the Mayfield wastewater treatment works”;
- The poorly-managed landfill site.
The AG has also been reporting Makana’s noncompliance with legislation on procurement and contract management, strategic planning, performance management, revenue management and human resource management. For example, the report stated that in Makana:
- Contractor performance was not monitored.
- Competitive bids were not invited, and deviations were not justified.
- Policies and procedures were not established to define how staff performance would be assessed, measured and managed.
- There are very few consequences for transgressions, financial losses and poor performance.
The AG said Makana Municipality Mayor Yandiswa Vara failed to respond to its previous findings, and the action plans of Makana Municipal Manager, Pumelelo Kate, were deemed “inadequate”.
MCF comment
Commenting on the AG report, Makana Citizens Front (MCF) leader and PR councillor Lungile Mxube said in a statement that the MCF was concerned about “the flagrant abuse and transgressions of the municipality’s supply chain management (SCM) system, SCM policy and Municipal Finance Management Act (MFMA) SCM Regulations.”
“The Executive Mayor cannot claim any ignorance or ‘head in the sand attitude’. In the MCF’s view, the Executive Mayor has been complicit,” Mxube said.
Efforts to solicit comments from the Makana Municipality and local political stakeholders are ongoing. We will publish a full report in the next edition of Grocott’s Mail on Friday, 6 June.
