The Beaufort West Municipality take cognisance of the recent MFMA Audit Report issued by the Auditor General with specific reference to irregular expenditure.
It is critical to clarify the misperceptions about irregular expenditure and it is incumbent upon the Municipality to respond to misleading media reports which create the impression that irregular expenditure equates to money that has been misappropriated/stolen. This kind of reporting adversely impact on the reputation of a municipality and have consequences for all municipalities. In the interest of Stakeholder Relationship Management, it becomes important that the Auditor General take reasonable steps to ensure that the public is properly informed, to avoid unnecessary tension between Municipalities and its citizens.
It is important to firstly define the term irregular expenditure. Irregular expenditure referred to money that was not spent in the manner prescribed by law. As per the Municipal Finance Management Act “MFMA 56/2003” “irregular expenditure”, in relation to a municipality or municipal entity means –
The following are examples of irregular expenditure:
The irregular expenditure of R52 million referred to by the Auditor General relates to transactions where SCM policies were not always followed. The biggest amount relates to a contract that was awarded to ASLA in 2008 for R31 509 033.75. The components could be stratified as follows:
The second biggest amount of irregular expenditure relates to the upgrade of the Merweville sports ground ( R13,600 million) and the rest relates to projects related to the drought ( Upgrading of Klein Hans Rivier Scheme and the installation of new boreholes).
Audit terms and jargon are confusing to the public as it is, and the Auditor General staff should ensure that the public is educated in terms such as fruitless and wasteful expenditure, irregular and unauthorised expenditure, unqualified, qualified, and clean audit opinions. Examples of misinterpretation of audit opinions is that the public deem unqualified audit reports as a disaster and a qualified opinion as positive. It is therefore imperative that the Auditor General as a key stakeholder in Local government act in the best interest of municipal institutions.
Municipal ManagerLast published 05 July 2019