A-G’s local government report released
WAVERLY – High levels of non-compliance with legislation and the resultant irregular expenditure are a concern.
The auditor-general’s report on the local government audit outcomes was unpacked on 25 July in Waverly.
The briefing covered all Gauteng municipalities. Auditor-General Thembekile Kimi Makwetu said, “This was the only province that had 100 per cent unqualified audit opinions. We continue to highlight that non-compliance with legislation remains the major obstacle preventing most municipalities in the province from attaining a clean audit.”
The event was led by Gauteng’s business executive Dumisani Cebekhulu. The results of the report showed that only 9 per cent of the municipalities achieved clean audits in Gauteng.
The quality of the financial statements submitted for auditing regressed. The report showed that the reason for the poor financial statements stemmed from a lack of accountability by the chief financial officers and finance official who did not adequately review the information during the year.
The province also saw a decrease in unauthorised expenditure from R3.2 billion to R2 billion. However, irregular expenditure increased significantly from R1.3 billion in the previous year to R3.6 billion, which stemmed from supply chain management non-compliance as well as expenditure on contracts awarded in previous years, known as legacy contracts.
The City of Johannesburg Metro incurred R706 million of the irregular expenditure, with R313 million related to legacy contracts.
The report said, “The province’s high levels of non-compliance with legislation and resultant irregular expenditure, increase the risk of possible losses of public resources.”
Cebekhulu said that the reasons for the poor levels of accountability came from the slow response by administrative leadership to improve internal controls and inadequate consequences for transgression. “Consequences and accountability featured as prominent elements of our messages and we provided many recommendations, including the use of the accountability cycle.”
Cebekhulu said that his office is encouraged by the progress made over the years by municipalities but will continue to push recommendations for improvement.
Access to the Auditor-General’s report can be found here:
Details: www.agsa.co.za
