PLETTENBERG BAY NEWS - Noncompliance with the supply chain management (SCM) regulations and failure to prevent irregular expenditure brought Bitou Municipality’s clean audit streak to an end, according to a detailed report by the Auditor-General business executive responsible for the Western Cape, Sharonne Adams.

Bitou was one of three Western Cape municipalities that lost their clean audit status in the previous financial year. The other two are the Garden Route District Municipality (previously known as Eden) and the Cape Town Metro.

Material noncompliance with SCM regulations at all three municipalities, failure to prevent irregular expenditure at Bitou, and weaknesses in consequence and revenue management at the City of Cape Town Metro are listed as the three main reasons why these municipalities have slipped.

Adams said Bitou received an unqualified audit in 2016/17 because appropriate SCM procurement procedures were not followed. Other areas of concern included irregular and wasteful expenditure.

First time in 4 years
This is Bitou’s first unqualified audit in four years after digging itself out of Auditor General Kimi Makwetu’s bad books over the past seven years. In 2011 the report revealed 92 findings, 23 of which were matters that affected the audit outcome.

This was followed by a year of strict control and several turnaround measures which led to a major decrease in findings. The next audit only revealed 56 findings of which only 14 impacted the outcome.

During 2013/14, the Auditor General only noted 21 findings – none of which affected the audit outcome. Thereafter the municipality managed to achieve clean audits every year until now.

Since the local government elections resulted in a hung council in 2016, causing major political turmoil brought on by coalition agreements, several red flags have been raised over the town’s financial affairs. The municipality is yet to comment on the details that led to its current audit status.

Irregular expenditure
Garden Route District Municipality (Garden Route DM) communication head Herman Pieters said this municipality’s regression was mainly due to irregular expenditure of R32-million identified by the Auditor General.

According to Adams' report, the total irregular expenditure incurred in the Western Cape was R173-million (2015/16: R174-million), R163-million of which related to noncompliance with SCM regulations. "Ninety-eight per cent of the SCM-related irregular expenditure involved current year transgressions and these transgressions can be isolated to unjustifiable deviations in terms of SCM regulation 36, the extension of contracts without the necessary approvals, and noncompliance with local content prescripts," read the report. The main contributors to irregular expenditure were the City of Cape Town (R47-million), Beaufort West (R36-million) and Garden Route District Municipality (R32-million).

Pieters said the Garden Route DM's irregular expenditure mainly relates to two tenders: The supply of fuel (R10 220 772), and the appointment of a panel of service providers for hiring of machinery for their roads department that services the entire region (R24 812 563).

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