GARDEN ROUTE NEWS - David Zeller, chairperson of the Garden Route Ratepayers Association (GRRA), has issued a statement challenging the Garden Route District Municipality (GRDM) and DA's claims that its recent "clean audit" reflects "exemplary" governance.
Referring to several aspects in the municipality's annual report and the Auditor-General's report, Zeller says this is misleading. "A clean audit confirms that financial statements comply with accounting standards. It does not certify effective governance, lawful procurement, or successful service delivery."
He mentions a number of serious governance concerns, including irregular expenditure approaching R44m, unauthorised expenditure within the office of the municipal manager exceeding R11m, rising financial impairments and declining service delivery performance.
The municipality's own reporting and the Auditor-General's findings highlight several concerning trends:
• Irregular expenditure increased from about R35.1m to R43.9m, despite Council having written off nearly R28m in irregular expenditure.
• Fruitless and wasteful expenditure increased from R91 335 to R338 558.
• Receivables considered unlikely to be recovered increased from about R3.9m to R17.5m.
• Unauthorised expenditure exceeding R11m occurred within the office of the municipal manager.
• The municipality faces a potential VAT exposure currently under review by the South African Revenue Service (Sars).
• Infrastructure performance targets audited by the Auditor-General were not achieved despite significant spending.
"These figures show a municipality where irregular spending is increasing, avoidable expenditure is tripling, and money owed to the municipality is becoming unrecoverable."
As in previous years, Council wrote off nearly R28m in irregular expenditure. "Instead of declining after the write-off, irregular expenditure has increased again to nearly R44m, raising serious questions about whether meaningful corrective action was ever taken and whether proper financial discipline is being enforced within the municipality.
"Where irregular expenditure occurs, the law requires that responsibility be determined and recovery pursued where appropriate, including from officials responsible for the loss."
Infrastructure delivery concerns
According to Zeller, the municipality's own annual report acknowledges delays in major infrastructure projects, including the regional waste management facility where the contractor had to be terminated and the project re-tendered after limited progress. "Such delays raise legitimate questions regarding project management, procurement oversight and infrastructure delivery capacity."
'Law firm investigations should be reviewed'
"The GRRA is also concerned that a law firm, which was not VAT-registered, was appointed to conduct investigations on behalf of the municipality. The municipality failed to conduct proper supplier due diligence.
"Payments made for investigative work may therefore have been irregular, and must be recovered. Where investigations influence council decisions, the integrity of those decisions may be compromised."
The GRDM) commented as follows:
"The Garden Route District Municipality (GRDM) notes the response provided by the Auditor-General of South Africa (AGSA), which confirms that the GRDM obtained its 5th consecutive clean audit opinion.
"The GRDM has also gone as far as to extend an invitation to the George Ratepayers and Residents Alliance (GRRA) to participate in a face-to-face discussion to provide context. That invitation was declined.
"The GRDM's response is therefore grounded in the published audit record rather than unsubstantiated characterisations."
The Auditor-General of South Africa responded as follows to a query from the newspaper:
"The Auditor-General of South Africa (AGSA), Tsakani Maluleke, can confirm that it audited the Garden Route District Municipality's (GRDM) [annual report] during the 2024/25 financial year and the municipality obtained a clean audit opinion.
"In terms of Section 20 of the Public Audit Act, an audit report must reflect an audit opinion, conclusions or findings on the financial statements, predetermined objectives and compliance engagement. To achieve a clean audit outcome, an auditee must have no material findings reported in their audit report relating to the financial statements, predetermined objectives or compliance with laws and regulations.
"The AGSA does not report on specific supplier appointments, procurement due diligence, or potential recovery actions beyond what is formally reported in published audit reports. Matters relating to the appointment of service providers and any consequential actions fall within the operational responsibility of municipal management.
"The GRDM's annual report and the audit report, which are publicly available, have disclosed the matters enquired on, with no material findings identified leading to the audit outcome for the municipality remaining a clean audit.
"A regularity audit differs significantly from a forensic investigation. Its primary purpose is to provide reasonable rather than absolute assurance that financial statements are free from material misstatement and that there has been limited compliance with key legislation. The evidence obtained is persuasive in nature and subject to statutory time constraints and inherent audit limitations.
"In contrast, an investigation entails a detailed and critical examination of financial records to establish the facts of a specific matter, determine responsibility, quantify any losses and identify potential fraud or theft. Investigations are not time-bound and aim to obtain conclusive evidence to confirm or refute allegations."
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