Merafong is trying to hide its adverse audit opinion from the ratepayer – why?

06 Jul 2022 in Press Statements

While residents of Merafong Local Municipality continue to suffer the indignity of living without water, electricity and regular refuse removal, the municipal council is also intent on hiding the true state of its malaise by keeping residents in the dark about audit outcomes.

The DA shares the concerns and anger of the residents over the shocking state of their once beautiful rural towns. We believe it is best to take residents into our confidence and to be honest about what is going on.

During a council sitting last week, a report was tabled “in committee” about the shocking findings of the Auditor-General on the annual financial statements of the municipality. It is not clear why the item was conducted in committee which means that the public is not allowed in the chamber when the audit report is freely available to the public. However, residents should be aware of the following:

  • Merafong received an adverse audit opinion. This means that according to the Auditor-General, “The financial statements contain material misstatements that are not confined to specific amounts, or the misstatements represent a substantial portion of the financial statements”.
  • The basis for the adverse outcome includes an understatement of assets, an overstatement of debtors, inadequacy of record-keeping, incorrect cash flow statements and various material uncertainties.
  • The municipality is currently legally non-compliant on several counts. Financial statements were not delivered within legal timeframes, were not prepared within legal formats and what was submitted was a lie.
  • Accounting officers awarded bids without inviting competitors, and then they did not monitor the performance of the companies they appointed. This resulted in irregular expenditure of over R33 million.
  • The Municipal Public Accounts Committee lamented in their report that the accounting officer does not know how to prepare financial statements and the origin of the statements is unknown or uncertain.

After a marathon council sitting of over 5 hours, the council made several resolutions that residents should know and monitor:

  • The Executive Mayor is tasked to get urgent help from the provincial government.
  • Permanent staff appointments need to be done urgently to avoid the high level of accountability failures by acting staff.
  • The departments causing most of these findings which are Infrastructure and Electricity in particular need be “scrutinized” for poor performance.

While it is a good sign that the Municipal Public Accounts Committee report was passed by Council at all, residents should take note of the bigger picture. Local governance in Merafong is in terminal distress and ANC infighting is at unprecedented levels. The Municipal Public Accounts Committee report was not written by Municipal Public Accounts Committee because no one has the skills to do it. As a going concern, Merafong should not exist.

The situation in Merafong can be turned around only if there is a political will to get the basics right, so residents can once again be proud of Merafong. Our community members, private security companies, CPFs, and business leaders have been outstanding in keeping our towns going, and we only need a new public governance regime.