Lentswe, Klerksdorp - The Auditor General questions the viability of the municipality as a going concern after suffering a financial loss close to R1 billion.
The Auditor-General’s annual report for the financial year 2022/23 was tabled at a council meeting last week.
Cllr Johannes le Grange, DA caucus leader, commented by saying the DA has for years consistently raised concerns over the administration’s reluctance to rationalise the budget in line with Treasury guidelines.
“For several years, the ANC majority has steamrolled successive unfunded budgets through Council,” he added.
“This report comes only two weeks after the municipality’s CFO, Mercy Phetla, and employees of GMHM Construction and Projects were arrested on charges of corruption.
“Incidentally, a R50 million payment to GMHM Construction and Projects was identified as irregular by the AG.”
Le Grange highlighted that liabilities exceed its assets by R2 682 billion and the municipality recorded R369 million in unauthorised expenditure, R273 million in irregular expenditure, and R233 million lost to fruitless and wasteful expenditure.
He explained: “The municipality recorded almost 60% revenue loss through water losses and almost 40% financial losses were incurred because of electricity theft through illegal connections.
“Poor financial management, corruption, fraud and the adoption of unfunded budgets severely hamper the ability of the municipality to deliver services and to maintain and/or expand on infrastructure.”
The city also incurred a loss of R43 million from the Fresh Produce Market, which will increase, “due to the municipality’s failure to collect the 5% fees required to pay market agents”.