- Sedibeng Water received another qualified audit from Auditor General Tsakani Maluleke. His last unconditional check was in 2015-16.
- The water authority, which serves more than a million residents in southern Gauteng, recorded irregular expenditure of R1.7 billion last year.
- The AG’s office says it has a hard time confirming some of the board’s expenses.
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Auditor-General (AG) Tsakani Maluleke has given Sedibeng Water another qualified audit report after finding that the organisation’s financial statements understated its irregular as well as fruitless and wasteful expenditure by millions.
The water board serves more than one million residents in the North West, Free State and Northern Cape municipalities. His last unconditional check was in 2015-16.
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Maluleke said Sedibeng Water’s 2020/21 annual report and financial statements. show contracts where the company paid more than the agreed amount. He also did not properly account for financial transactions.
Maluleke said Sedibeng Water had not included all its irregular expenses in the notes to its financial statements as required by the Public Financial Management Act. After the audit, the irregular expenditure amounted to 1.7 billion rand.
“This was due to payments in excess of the contract amount, resulting in an understatement of irregular expenditure of R273.5 million,” Maluleke said.
“Furthermore, I was unable to obtain sufficient appropriate audit evidence to support the irregular expenditure included in the notes to the financial statements as sufficient appropriate audit evidence was not provided. I have not been able to confirm this by alternative means.’
Maluleke said she could not determine whether further adjustments were needed to the irregular expenditure, which rose from 1.4 billion rand the previous year.
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Maluleke said Sedibeng Water had not included in the notes to the financial statements all the sunk and wasteful expenditure due to payments resulting from time extensions paid to contractors and consultants.
This led to an underestimation of wasteful and wasteful expenses by 116 million rubles. Fruitless and wasteful expenses after the audit amounted to 1 billion rubles.
“I have not been able to determine whether further adjustments are needed for the fruitless and wasteful expenditure identified in the financial statements of R1 billion,” she said.
Sedibeng workers downed tools in October last year over late payment of salaries.
In May of this year, the Minister of Water Supply and Sanitation, Senzo Mchunu, dissolved the board of the organization and appointed a new interim one.
Abe Mbulawa was appointed CEO of Sedibeng Water in January 2021 but later died of complications from Covid-19 in June of that year. Mbulawa was replaced by Toto Molobye.
In his comments in the organisation’s annual report, Sedibeng Water interim chairman Sfeta Sienga said the negative impact of rising municipal debt on Sedibeng Water’s liquidity and financial sustainability remained a “worrying” risk factor during the 2020/21 financial year.