Audit outcomes for municipalities worsening
The report reveals that of the country’s 257 municipalities, only 18 (8%) received clean audits.
A LARGE majority of the country’s municipalities continue to disregard Auditor-General Kimi Makwethu’s recommendations, resulting in worsening financial positions, he has announced.
Makwethu made the revelation while releasing the 2017/18 Consolidated General Report on the Local Government Audit Outcomes in Pretoria on Wednesday. The AG audited 257 municipalities and 21 municipal entities during this financial year.
The report reveals that of the country’s 257 municipalities, only 18 (8%) received clean audits – a decline from the previous year’s 14%. About 12 of these municipalities were in the Western Cape, while KwaZulu-Natal, Gauteng and Eastern Cape each had one municipality with a clean audit.
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“Since the current local government administration took office, the governance issues affecting municipalities have consistently been flagged with them in various formats, including individualised meetings with the leadership and through the AG’s 2016/17 general report, but the latest set of results indicates that this constant advice has largely been ignored,” Makwethu said.
According to the report, municipalities recorded a decreased irregular expenditure of R25 billion, compared to R29 billion in the previous year.
In the report, Makwethu notes that accountability in local government continues to decline.
“Of the audited municipalities, the audit outcomes of the 63 regressed while those of 22 improved. Only 18 municipalities managed to produce quality financial statements and performance reports, as well as complied with all key legislation … This is a regress from the 33 municipalities that received clean audits in the previous year,” Makwethu said.
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Makwethu bemoaned the continued lack of consequences for transgressions and irregularities, saying there continued to be a failure to investigate findings.
The AG said 74% of municipalities did not adequately follow up allegations of financial and supply chain management misconduct and fraud, while 45% of councils did not have the required mechanisms for reporting and investigating.
The AG said the governance lapses in local government could only be turned around if leadership takes the lead in the drive towards clean administration in the public sector.
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