Good day,
Yesterday, 3 December 2013, we convened a provincial oversight meeting on operation clean audit at Polokwane Royal. As you would rightfully recall, that government in 2009 signed a pledge committing its spheres of government to achieving clean audit outcomes by the year 2014. This commitment has been hard to achieve and it is a concern for everyone as municipalities are a strategic sphere of government focused on growing local economies, providing infrastructure and basic services delivery.
Our municipalities have the highest backlogs in basic services, are financially distressed and some have the highest number of informal settlements and are under-spending on their infrastructure grant. As a department responsible for providing support to municipalities, we needed to gather and engage both the political and the administrative leadership of our municipalities as we did yesterday.
We needed to present to ourselves as leadership facts as to the state of affairs in our municipalities, bleak as it is and deliberate that a lot has to change, wrongs must be made right and that issues of concern must be addressed as a matter of urgency.
The implementation of Local Government Turn Around Strategy is something that must be pursued with vigour and purpose with special emphasis to service delivery, governance, financial management, infrastructure development and most importantly fighting corruption. We are saying that the strategy implementation must be a priority because it is a blueprint for better service delivery aimed at achieving a responsive, accountable, effective and efficient local government
In our quest to help municipalities that are experiencing undesirable audit outcomes and financial problems, the department has commissioned over a three year period the services of Financial Accounting Firms under the Resident Accountant Project to provide technical financial management and hands on support to municipalities. These Accounting Firms assist municipalities to address audit issues while
building sufficient capacity to improve and stabilise financial management.
We acknowledge that we still have challenges:
Our municipalities have regressed and this is a matter of great concern. We have identified the challenges that gave rise to the poor performance by our municipalities. These challenges are non-compliance with Supply Chain Management processes, unauthorised, irregular, fruitless and wasteful expenditures, accounting for assets in terms of the new accounting standards which requires municipalities to account for all movable and immovable assets in their asset registers, lack of supporting documents, completeness of revenue, ineffectiveness of governance structures, lack of application skills and knowledge of financial management.
Most rural municipalities are grant dependent with no revenue base - no formalised townships (Aganang, Fetakgomo, etc.). Revenue collection, in those with revenue base, is poor - implementation of debt collection policy. Some municipalities have shown signs of being in financial distress (e.g.). Most municipalities received negative audit outcomes due to lack of internal controls, lack of basic skills and non-compliance with relevant legislation. Most Municipalities owes Waters Boards and Eskom. Most municipalities are not implementing Provincial Debt Forum resolutions.
The department will continue to ensure that our municipalities improve their record management, conduct frequent bank reconciliations and also improve compliance with Supply Chain management. We have already established the Provincial Audit Outcomes Oversight IGR Forum. This structure includes all five District Mayors and twenty five Local Mayors. The primary mandate of this structure is to provide political leadership and guidance towards achieving clean audits in all municipalities. The forum compliments the Auditor-General's work on governance and financial management areas.
We have a firm believe that, with all the efforts put on achieving clean audit, we will able to overcome all these challenges.
In conclusion I would like to thank members of the media for the interest you are showing in this matter and other related matters of governance. Working together will indeed make us to do more.
I thank you
For more information please contact:
Motupa Selomo
Departmental Spokesperson
Cell: 082 717 0342
E-mail: SelomoME@coghsta.limpopo.gov.za
