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Audit exposes deepening rot at Free State municipalities

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Auditor-General (AG) Tsakani Maluleke has blamed inaction by political and administrative leadership at Free State municipalities as a key contributor to the poor financial performance at most councils in the province.

She said this when she released the 2020-21 audit outcomes on local government on Wednesday.

Maluleke said the audit outcomes for the province regressed during the period under review and no municipality in the Free State achieved a clean audit during the five-year period of the previous administration.

“Inaction by political and administrative leadership continued to be a deliberate obstruction to municipalities’ effective functioning,” said Maluleke, adding provincial leadership should be very concerned about this state of affairs.
She said only 52 percent of municipalities submitted their financial statements on time, compared to 80 percent in 2016-17.

“By the date of this report, the audits of seven municipalities had not been completed as a result of the late or non-submission of financial statements,” the AG pointed out.

“We escalated the non-submission to the relevant councils and the provincial leadership, but their response was ineffective.”

A total of six municipalities achieved unqualified audit outcomes with findings while 10 had qualified audits with findings and seven are still outstanding due to late submission.

Unqualified audit outcomes with findings were recorded at Kopanong, Letsemeng, Masilonyana, Metsimaholo, Mohokare and Moqhaka local municipalities.

Qualified audits with findings: Dihlabeng, Mafube, Maluti-A-Phofung, Mantsopa and Matjhabeng local municipalities as well as Mangaung Metro and Fezile Dabi and Lejweleputswa district municipalities.

Maluleke expressed concern at the continued hiring of consultants at most municipalities in the province saying the move did not really help the situation because the initial financial statements prepared by the municipalities were poorly prepared.

“They continued outsourcing their responsibility by appointing consultants after year-end to prepare the financial statements and to construct and correct the underlying information,” she said.

“A total of R254 million had been spent on consultants since 2016-17.

“The reliance on the audit process to identify errors in the poor-quality financial statements submitted for auditing also continued.

“All auditees needed to make significant adjustments to correct material errors in the figures presented.

“If this had not been allowed, another seven auditees (41 percent) would have received qualified audit opinions.”

The AG’s office also performed additional audit work on the infrastructure and payment profiles of Masilonyana, Maluti-A-Phofung and Tokologo.

“We determined that only Masilonyana had a plan and budget for the routine maintenance of infrastructure assets, while Maluti-A-Phofung and Tokologo had no plan to ensure that their infrastructure assets were properly maintained,” said Maluleke.

“The municipalities were not fulfilling their service delivery mandates.

For example, all seven wastewater treatment works at Maluti-A-Phofung collapsed and the plants were not operational due to a combination of poor management, theft and vandalism.

“This resulted in raw sewage being discharged into the environment.

“We issued notifications of material irregularities for four of these plants due to the likely substantial harm to the public.”

She also found that municipalities had gone backwards in meeting project deadlines for infrastructure projects.

In 2016-17, for example, only 10 percent did not meet project deadlines, but this had increased to 60 percent in 2020-21.

The AG cited Metsimaholo where a project to instal 4 000 sewer connections was delayed by almost two years due to poor planning.

During the course of the project, additional houses needing sewer connections were also identified and additional time was needed for repairs.

“Most municipalities struggled to perform preventative maintenance and safeguard their infrastructure assets, because they spent only one percent of their infrastructure value on repairs and maintenance, compared to the norm of eight percent. Repairs were only done after assets had broken down,” said Maluleke.

According to the AG, a wastewater treatment plant that was earmarked to be decommissioned in Moqhaka continued to be used because the new plant had design challenges which took long to be fixed.

The old plant could not function effectively due to lack of maintenance over the years resulting in sewage spillage that contaminated the Vals River.

Financial health at all municipalities in the province continued to deteriorate.

Eleven auditees or 73 percent indicated they were uncertain whether they would be able to meet their financial obligations when they became due.

The debt of these municipalities, according to the AG, exceeded what they can convert to cash by R8.69-billion.

The amounts they owed to Eskom and the water boards continued to increase, reaching R12.45-billion.

Unmetered consumption, theft and a lack of maintenance resulted in average water losses of 49 percent and electricity distribution losses of 20 percent.

Unauthorised expenditure for the year amounted to R2.9-billion with fruitless and wasteful expenditure at R208.5-million.

Irregular expenditure was R7.2-billion.

“Urgent action to strengthen controls is required to achieve the desired outcome,” said Maluleke.

“All role players should be dedicated to rebuilding strong and credible municipalities with high levels of transparency, integrity and accountability.

“The provincial treasury, the MEC for local government and the provincial cooperative governance and traditional affairs department should intensify interventions to support and strengthen the capacity of municipalities.

“The incoming councils should set the correct tone at the top.

“They have the opportunity to deal with years of impunity and lack of consequences and to champion improved audit outcomes.

“They should ensure that there is stability in that administrative leadership vacancies are filled, and officials are capacitated to perform their duties.

“This will ensure service delivery and earn the trust of their communities.” – Staff Reporter

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Ngwathe pays Eskom to fix damaged line

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BLACKOUT . . . The Ngwathe electrical network tripped on Friday and damaged Eskom’s equipment due to overloading

Ngwathe Local Municipality in the northern Free State has paid R1.1-million to Eskom so it can repair damages to the power line in the area caused by overloading.

Eskom provincial spokesperson Stefanie Jansen van Rensburg said in a statement the payment was made on Monday morning and work to restore supplies to Parys and Vredefort has started.

“Repairs to the Eskom equipment will now commence,” said Van Rensburg.

“Based on the assessments of the damage, supply to Ngwathe should be restored by midnight tonight,” she added.

The spokesperson however said the initial repairs were focusing on the hot connections and will only be temporary to assist communities.

Another outage will be scheduled to repair the transformer bushings that were also damaged during the overloading incident.

The Ngwathe electrical network tripped on Friday and damaged Eskom’s equipment due to overloading.

“Since 2018, Eskom has warned Ngwathe that their continued exceedance of their Notified Maximum Demand (NMD) – the contracted amount of electricity supplied by Eskom to the Municipality – will eventually result in damage to the Eskom network and that the municipality needs to apply for an upgrade in their NMD.

“In August 2021 and in April 2022, Eskom informed the municipality that any damage to the Eskom network that is caused by the municipality’s negligence, will be at the municipality’s cost.

“The municipality agreed to this condition and, although they were well informed and aware of the risks, they did not take the necessary precautions or made sufficient efforts to upgrade their NMD,” Van Rensburg explained.

Following the incident, Eskom insisted on the municipality making an upfront payment as it is one of the municipalities in the province sitting with a huge debt to the national power utility.

As at end June, Ngwathe’s overdue debt to Eskom totalled R1.89 billion.

Eskom says this debt continues to grow as current accounts are not paid in full.

“Ngwathe’s non-adherence to payment conditions and negligence in protecting the power system, jeopardises Eskom’s financial sustainability as well as the security of supply to the residents of towns such as Parys and Vredefort.

“Supply to Ngwathe will be restored to the capacity as per the contracted NMD.

“Risks of overloading and consequent damage remain, and it is imperative that the municipality invests in upgrading its supply,” according to the power company. – Staff Reporter

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Mangaung electricity tariffs up

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POWER TARIFFS UP . . . Local power distributor Centlec has hiked electricity charges

Electricity tariffs in Mangaung have gone up by 7.47 percent.

In a statement released on Thursday night, local power distributor Centlec said the increase was due to come into effect at midnight on July 1 following approval by the National Electricity Regulator of South Africa.

The increase will cover the period July 1, 2022 to June 30, 2023.

“A guideline increase of 7.47 percent on electricity tariffs for Centlec was therefore approved with effect from the 1st of July 2022 for the 2022/23 financial year,” read part of the brief statement.

It said a more detailed outline of the increases will be announced soon. – Staff Reporter

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CUT students arrested for protesting against exams

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DISTURBANCE AT CAMPUS . . . Five students protesting against exams at the Central University of Technology in Bloemfontein have been arrested

Police have arrested five students from the Central University of Technology (CUT) for public violence after they embarked on an unsanctioned protest against the institution’s decision to have the mid-year exams conducted in person at its two campuses in Bloemfontein and Welkom starting this Thursday.

The exams are set to run until July 20.

The fracas follows an announcement by CUT acting vice-chancellor and principal Professor Alfred Ngowi on Wednesday in which he stated the exams would take place physically at the two campuses as scheduled.

Ngowi said a detailed discussion about online exams at the Welkom campus concluded that it would not be feasible to conduct online exams because circumstances have changed regarding the COVID-19 restrictions and that it was also against the policy of the university.

“CUT is a full-contact institution and not a distance learning institution and therefore does not have the authority to accredit examinations that are not done under CUT’s status as a full-contact institution,” said Ngowin in a recorded video.

Ngowi told the students that academic assessment is one of the important building blocks of their qualifications.

He warned the students against disrupting the exams saying they would face disciplinary action as such action will be illegal.

“The unreliability of the power supply may have unintended disruptive effects,” he said.

“The COVID-19 restrictions which necessitated virtual classes and virtual assessments have all been suspended and the various accrediting bodies to which CUT is affiliated may not accredit online assessments.

“Therefore, we will proceed with physical assessments.

“Management has made all necessary preparations for the smooth running of the mid-year assessments, which have been communicated to all students.

“Therefore, any student who plans to disrupt the physical examinations on our campuses must be aware of the legal and disciplinary consequences.

“In addition, the CUT management has put several measures in place to protect the constitutional rights of all our students who are prepared for and prefer to sit for physical assessments.

“Students must be aware that any disruptions of the planned and scheduled assessments are illegal and unlawful, and students who act outside the law will have to face the consequences of their actions.

“Students further need to note that failing the upcoming academic assessments will directly impact their NSFAS funding status.

“No further funding will be available to NSFAS-funded students who fail the assessments or fail to take the upcoming assessments.”

But, in a statement, members of the South African Student Congress (SASCO) at the university argued that since all assessments had taken place online due to the COVID-19 restrictions, “it is only normal that the exams take place online as well”.

SASCO also argued that some students had not received their allowances from the National Student Financial Aid Scheme (NSFAS) and it would therefore be impossible for them to write their exams in a physical setting.

But Ngowi addressed the matter earlier in the same video: “As previously communicated through the Student Representative Council, NSFAS-funded students who still have unresolved challenges with their accommodation are encouraged to make written submissions to the relevant faculty deans in that regard.”

Park Road police spokesperson Lieutenant Colonel Thabo Covane said members of Public Order Police Unit arrested five male students for public violence at the CUT’s Bloemfontein campus on Thursday morning.

He said the group of protesting students was warned by the operational commander to disperse within a given time as they were contravening the conditions stipulated in an issued court order but refused to do so.

“The protesting students became violent and started throwing stones and bottles at the police and the security officers,” said Covane.

“The police used stun grenades to disperse the crowd. The other group ran into King Edward Street and blocked traffic by placing stones on the road.

“Police then arrested the five students with ages ranging from 18 to 22 years.”

The arrested students are expected to appear in the Bloemfontein Magistrates Court on Monday facing charges of public violence and contravening a court order. – Staff Reporter

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