KNYSNA NEWS - The harsh reality of Knysna Municipality's financial state has been highlighted by the Auditor-General of South Africa and described by the DA as being "only good on paper".
In Auditor-General Tsakani Malu-leke's report, Knysna Municipality received an unqualified audit opinion with findings for the 2024/25 financial year.
While the report states that the municipality's financial statements were fairly presented, it highlights recurring governance failures, deteriorating infrastructure, environmental risks, weak financial controls and poor service delivery.
Reacting to the report, DA Knysna's mayoral candidate, Levael Davis, warned that Knysna is at a crossroads. "The report reveals what most of us already know - that the town is losing millions in revenue due to failing infrastructure and deteriorating systems. These findings require our immediate attention and a fundamentally different approach to governance," he said.
Although Knysna received an unqualified audit opinion, Davis said the findings tell a different story. "The books may appear balanced on paper, but the accompanying findings reveal key systemic failures that have been allowed to persist for years."
The Auditor-General found recurring weaknesses in governance, oversight and consequence management, while the leadership was criticised for failing to adequately monitor compliance and implement corrective action.
The report also found that no reasonable steps were taken to prevent R92.2m in irregular expenditure and R25.6m in unauthorised expenditure, while municipal debt was not collected within the required time frames.
Water and environmental concerns
Water losses reached 47.98%, well above the municipality's target of below 35%. Davis attributes an estimated R19.6m in lost revenue to ageing infrastructure, leaks and inadequate metering.
The Auditor-General also flagged material irregularities relating to wastewater treatment and the municipal waste transfer station, warning of risks to the Knysna estuary, surrounding ecosystems, groundwater and public health.
Further concerns included procurement irregularities, supply chain weaknesses and human resource shortcomings. The municipality achieved only 66.6% of its planned service delivery targets while spending 61% of its capital budget.
The municipality responds
The Knysna Municipality said it was misleading to suggest the findings were new, noting that most of them had already been acknowledged and are being addressed through ongoing corrective action.
It said its audit outcome had improved from a qualified audit opinion to an unqualified audit opinion with findings, "reflecting progress in governance and financial management". It said audit action plans are being implemented alongside water loss interventions, infrastructure maintenance, financial recovery measures, appointments to critical posts and supply chain improvements under the oversight of Council, Provincial Treasury and the Section 154 Support Programme.
While acknowledging that challenges remain, the municipality said its focus is on implementing sustainable solutions rather than engaging in political rhetoric.
Davis maintained that the recurring findings reflect systemic governance failures. "Every resident who has experienced water outages, sewage spills or deteriorating roads is living with the consequences of these failures," he said, calling for stronger internal controls, improved co-ordination across departments and effective consequence management.
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