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Full Council Decisions - Auditor general report back on city performance
The improvement in terms of consequence management in the City was highlighted by the Auditor General of South Africa (AGSA) during a presentation on the City and its entities performance during the 2018/19 financial year at a Full Council meeting held today, 30 January.

Senior Manager from AGSA, Erin Sampson, noted the improvement in consequence management undertaken by the City during her presentation. “We highlight early in the year matters of concern to the accounting officer that need to be addressed. We did this in eThekwini for the previous financial year and noted that the areas of concern this year are the same as those raised previously. They are compliance management, financial management and procurement and contract management. However, during a subsequent review on 30 June 2019, although we noted some challenges post year-end, we have seen some discipline and action taken against officials in terms of consequence management in the City,” she said.

Sampson said recommendations to improve the audit outcome for the City included management improving controls over demand management and planning to ensure that a competitive bidding process is followed. She further said the accounting officer should implement effective consequence management structures within the Municipality to ensure officials are held accountable for their actions.

The tabled report noted that eThekwini Municipality and the Inkosi Albert Luthuli International Convention Centre both received an unqualified audit with findings in the 2018/19 financial year while uShaka Marine World achieved an unqualified audit with no findings.

Regarding areas of non-compliance, the AGSA highlighted the procurement and contract management explaining that in 2017/18 quotations were accepted from bidders who did not submit declarations of interest. While in the 2018/19 financial year material findings included insufficient evidence that performance of contractors was monitored, competitive bids were not advertised for the required minimum of 30 days and procurement was not done through competitive bidding process and deviations were approved when it was practical to invite bids.

Material findings in terms of expenditure management included prevention of irregular expenditure and payments not made within 30 days was also noted. The increase in irregular expenditure in the 2018/19 financial year was also noted.

The report stated that the majority of irregular expenditure related to inadequate evidence as well as irregularities identified relating to the approval for the use of certain suppliers for the IT system, invalid amendments to supply chain management (SCM) contracts and competitive bidding processes not followed and three quotations not obtained.

Sampson said the root causes delaying good governance need to be addressed. These include the lack of effective consequence management for transgressions with prescribed SCM regulations, policies and procedures and the often slow response from management in implementing action plans and addressing control deficiencies.

Following the presentation, eThekwini Mayor Councillor Mxolisi Kaunda said the presentation was welcomed as it showed that while improvements have been made in the City there was still a lot of work to be done. “At our Executive Committee meeting on 28 January the Audit Committee report showed a slight improvement in consequence management as did the AGSA today. Going forward we should work from that foundation and build on it especially in terms of system control.”

Mayor Kaunda said consequence management will be worked on decisively in the City. “We will also be looking at the performance contracts of senior management in order to implement controls and achieve our outcomes. We receive the comments from the AGSA and will work on them,” he said.

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