Newcastle is one step away from achieving the coveted clean audit opinion.
This is according to representatives from the Auditor-General of South Africa (AGSA), during a presentation to the Newcastle Local Council on the 2017/2018 term.
Audit opinion is based on three factors:
The annual financial statement – is it fair and reflective?
Pre-determined objectives – relating to service delivery
Compliance with key laws – this includes the Municipal Financial Management Act (MFMA).
According to AGSA representatives, Newcastle had thus achieved the status of ‘financially unqualified opinion with findings’, the second-highest rating.
Last year, Newcastle received the same rating.
Among problem areas emphasised by AGSA were the writing-off of high amounts of debt, irregular/ wasteful expenditure and procurement irregularities.
These were also noted by Mayor, Makhosini Nkosi.
He stated improvement was better than regression, and said councillors and the community would understand the necessity of a proper indigent register.
Cllr Nkosi also said irregular expenditure would be investigated.
“We commit to improving on key focus areas. As leadership, we understand the need to fill our key positions.”
In response to the AGSA report, DA councillor, Bertie Meiring said there had to be sufficient political will to deal with matters raised by the Auditor-General’s office.
The DA’s main concern was with the procurement process.
Cllr Meiring claimed no effective steps had been taken to counter the abuse of Supply Chain Management (SCM) policies highlighted by the party in 2017.
He also said there were no systems to gauge staff performance.
IFP councillor, Dr Koos Vorster said his party’s concern was when comparing the 2015/2016 financial statements to last year’s, many problems had endured.
“Fruitless and wasteful expenditure was not addressed, and has in fact increased.”
Cllr Vorster said the areas identified by AGSA were the principal reason Newcastle found itself in an unfavourable financial position.