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Ethekwini owed R3 billion for water

The eThekwini Municipality is owed more than R3 billion for water from consumers in the city and recovering this debt was “doubtful”. This is according to the finding of annual report by the Auditor-General South Africa (AG) that was noted during a full council meeting on Wednesday. According to the report, material water losses and debt impairments were R3.31 on consumer debts. In addition the city wrote off R904.1 million last year as “irrecoverable”. The report was presented to councillors at city hall by Futhi Mhlongo from the office of the AG which showed that the city achieved an unqualified audit report. Mhlongo said material water losses of 108.83 million kilolitres (compared to 132.51 million kilolitres in 2016) resulted in revenue losses of R645.9 million, compared to R710.90 million in 2016, as a result of illegal connections and deteriorating infrastructure.

Mhlongo said there has been a reduction in this regard and she expected it to be further reduced. Regarding expenditure management, the AG report highlighted irregular expenditure of R514,8 million, of which the majority of the irregular expenditure was caused by the municipality not complying with supply chain management (SCM) regulation. Elaborating on this finding, Deputy City Manager for the Finance Cluster Krish Kumar said this was a result of a company tendering for a job as a close corporation and then registering as a Pty (Ltd) company. The award was made to the CC company which had duly registered to be a Pty (Ltd) and as a result there was a discrepancy with the tax clearance certificate of the company which was raised as an irregular expenditure in the AG’s report. The AG said it found area of improvement in the city’s management including risk management, internal audit and the audit committee across financial statements performance reporting and compliance with legislation.

Mayor Zandile Gumede welcomed the report adding that a number of issues that were raised by the report have been addressed. “We have implemented many measures which will reflect in the next report by the AG.” Kumar said the City achieved an unqualified audit adding that good progress has been made in several areas. He said irregular expenditure has been reduced with no further major findings apart from the one SCM issue raised. “From that perspective we have done well,” Kumar said.

Source: www.iol.co.za

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Ethekwini owed R3 billion for water

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