South Africa 21.6.2017 01:54 pm

Western Cape leads the pack with clean audits – AG

Auditor General Kimi Makwethu releasing the audit outcomes of South Africa's 263 municipalities. Seated next to him is Andries Nel, deputy minister of cooperative governance.

Auditor General Kimi Makwethu releasing the audit outcomes of South Africa's 263 municipalities. Seated next to him is Andries Nel, deputy minister of cooperative governance.

The predominantly DA-led province is miles ahead of everyone else.

The Western Cape continues to set the pace with 80 percent of the province’s municipalities having achieved clean audits, Auditor-General Kimi Makwetu revealed on Wednesday.

“The focused intervention and support by the provincial leadership through the premier’s coordinating forum, operating clean audit and the municipal governance review and outlook process continued to bear fruit,” Makwetu said in his executive summary of the voluminous consolidated 2015/16 local government audit outcomes report.

“Although Gauteng continued to perform well and was the only province where 100 percent of the municipalities received unqualified audit opinions on their financial statements, only Midvaal could hold on to its clean audit status. Not paying sufficient attention to supply chain management (SCM) and performance reporting led to three municipalities losing their clean audit status from the previous year.”

With a staggering 80 percent, the Western Cape led the provinces with the highest proportion of municipalities with clean audit opinions in 2015/16, followed by KwaZulu-Natal with 18 percent and the Eastern Cape with 16 percent.

In accounting terms, a “clean”, or unqualified opinion, is where the financial statements of an entity present a fair and accurate picture of the company and comply with generally accepted accounting principles.

In Gauteng, only Midvaal obtained a clean audit in the 2015/16 report.

Three Gauteng municipalities, Ekurhuleni metro, Sedibeng district and Mogale City regressed from clean audits to unqualified opinion with findings.

“Midvaal is commended for obtaining a clean audit outcome and for sustaining this outcome for the last three years. This was as a result of the municipality institutionalising a number of best practices, which should be replicated across the province, such as monitoring the implementation of action plans so that internal control deficiencies are addressed, maintaining stability in key positions, ensuring that governance structures are effective, and effectively applying consequence management,” said Makwetu.

He said after a notable improvement in 2014/15, the audit outcomes of KwaZulu Natal had shown “significant regression” this year.

“Instability and vacancies in key positions, coupled with the lack of accountability, internal control failures related to compliance with key legislation that were not adequately monitored, as well as the leadership’s slow response to recommendations made by internal audit units and audit committees, contributed to the regression at 14 municipalities,” said Makwetu.

The provinces with the poorest outcomes, based on the number of municipalities with disclaimed and adverse opinions or outstanding audits, were North West, Northern Cape and the Free State as the bottom of the stack.

– African News Agency (ANA)

 

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