FOR IMMEDIATE RELEASE
31 JANUARY 2023
ETHEKWINI’S FINANCIAL PERFORMANCE REMAINS SOUND
EThekwini Municipality is very proud to receive an unqualified audit opinion for the 2021/2022 financial year.
The Municipality’s audit outcome remains unchanged from the 2020/2021 financial year. Both its entities, namely the Inkosi Albert Luthuli International Convention Centre and the Durban Marine Theme Park (uShaka) received unqualified audits without findings. This continues the proud record the Municipality has of receiving an unqualified audit opinion.
Presenting the audit outcomes for the Municipality and its entities for the 2021/22 financial year, Head of Portfolio from the Auditor General’s Office, Vanuja Maharaj said in terms of the Municipality’s financial statements submitted, there were no material misstatements identified in submitted financial statements.
The report stated that the Municipality had incurred R1.50 billion in irregular expenditure over the 2021/22 period. The main causes of irregular expenditure were as follows, R495 million due to non-compliance related to local content, R317 million arose from the City Integrity and Investigations Unit investigations, R274 million as a result of non-compliance related to contract extensions, R249 million for non-compliance related to procurement under contracts secured by another organ of state, and R119 million was as a result of non-compliance related to deviations from procurement processes.
Commenting on the report, City Manager Musa Mbhele said appropriate plans are being implemented to address consequence management, contract management, and performance information. The Municipality will continue to work towards the Internal Control Framework to ensure that there is continued trust and confidence in the way the City is run.
“The Municipality will also be investigating the material irregularities and will initiate processes for the recovery of any confirmed financial losses as well as strengthen controls to prevent re-occurrence of financial loss. The Municipality is committed to ensuring effective consequence management, without fear or favour, to build the right culture in the Municipality. We are committed to moving towards performance, integrity, transparency, and accountability through more courageous, ethical, accountable, capable, and citizen-centric leadership,” Mbhele said.
EThekwini Mayor Councillor Mxolisi Kaunda was pleased that the overall financial situation of the Municipality remains sound and healthy.
“The Municipality is sitting with 51 days cash on hand, with 100 percent spend on major grants, delivered over R3 billion worth of free basic services, has a collection rate of 95 percent, and prudent borrowing resulting in a moderately geared balance sheet with a gearing ratio of 21 percent, which is well below the National Treasury benchmark of 45 percent. The actual operating expenditure was below budget despite substantial increase in bulk purchases,” he said.
He added that the Municipality achieved a credible and balanced budget and a AA+ investment grade credit rating with a stable outlook despite the current economic climate.
He did, however, raise concern over the rising amount owed to the Municipality.
“Appropriate measures are being implemented including debt relief programmes, approved by Council in December last year which is expiring at the end of February along with continuous enforcement of the Credit Control Policy,” said Mayor Kaunda.
Another concerning matter is the rising water and electricity distribution losses with tangible results expected from the implementation of the turnaround plan. Moving forward, the focus will be on curtailing non-critical operating expenditure, allocating more funds to repairs and maintenance, and increasing the days cash on hand while improving service delivery to communities, concluded Mayor Kaunda.
Issued by the eThekwini Municipality’s Communications Unit. For media enquiries contact the Municipality’s Spokesperson, Msawakhe Mayisela on 060 966 4220.