The Mossel Bay Municipality always endeavours to achieve the maximum impact out of the available limited funding that it receives for housing and infrastructure services.
The municipality, therefore, goes through a careful process when awarding housing and infrastructure tenders for projects.
The auditor general considers three aspects when conducting municipal audits namely whether predetermined objectives as set by the municipality are met, whether the annual financial statements are accurate and whether legislation has been complied with.
The municipality has achieved an Unqualified Audit Opinion with one finding. The finding this year related to the sub-contracting on housing tenders over R30m in value. Three housing tenders required sub-contracting to be considered. The municipality was able to provide proof to the AG that the feasibility of sub-contracting was considered in two of the tenders. In the third tender, although the feasibility of subcontracting was considered as was confirmed by the consultants to the tender, the documentary proof as provided by the consultants, was not to the satisfaction of the AG. This then caused the municipality to have a finding and not achieve the “clean” audit status. It must be borne in mind that legislatively there is no definition of a "clean" audit. This is a term that can be translated as an Unqualified audit opinion with no findings.
The municipality will require to make a minor adjustment to the internal control procedures that it follows, in that consultants on tenders over R30m will have to provide a letter, before a tender is awarded, that positively confirms that the feasibility of sub-contracting was considered.
The municipality is fully supportive of the sub-contracting legislation as this is an excellent means of stimulating local economic development in the Mossel Bay area and in particular to promote the growth of SMME’s.
Last published 09 December 2019