THREE Zululand municipalities, including Ntambanana, uMhlathuze and the uThungulu District Municipality, improved their previous year’s audit outcomes to progress to financially unqualified opinions with no findings – commonly known as a ‘clean audit’.
In addition, the District’s two entities – uThungulu Financing Partnership and the uThungulu House Development Trust – received unchanged clean audit awards from the Auditor-General of South Africa last week.
Seven (10%) of KZN municipalities and four (6%) of the province’s municipal entities received a financially unqualified audit opinion with no material findings on the quality of the annual performance report or compliance with legislation.
Encouraged by the emerging positive trend in local government audit results, Auditor-General (AG) Kimi Makwetu said auditees in this category demonstrated impeccable levels of discipline and oversight in their financial management and operational activities.
‘At these auditees, the breakdown of controls is easily detected and corrected timeously. Most importantly, they have accountable managers and leaders who are able to provide explanations and additional evidence in support of the transactions they are reporting on. They also have the support of strong oversight by mayors and councils that back the efforts of municipal managers and chief financial officers,’ said Makwetu.
Forty municipalities (56%) were unable to improve on their prior year audit opinions, which remained unchanged while 51% of municipalities in the province were again financially unqualified with findings.
However, the AG also called on government leadership to intensify its drive towards total good governance.
Hlabisa Municipality retained a qualified opinion, which means that they were unable to adequately and accurately account for all the financial effects of the transactions and activities they conducted. In this regard, the financial statements they presented were unreliable in certain areas.
‘Our analysis of financial health showed that the number of municipalities experiencing ongoing concern problems had increased, together with poor cash flow, debt management and underspending on capital budgets and conditional grants.
‘Fiscal discipline to improve liquidity and ensure excellence in debt administration and cash flow requires a coordinated effort from financial and performance management units at municipalities. This could add to the arsenal required to restore trust in local government’s capacity to deliver services to citizens,’ said the AG.
