submission of municipal financial statements
19 April 2007
Cape Town: The Auditor General (AG) today tabled its December quarterly
report on the submission of financial statements by municipalities for the
financial year ended 30 June 2006, noting significant improvement in the number
of statements submitted within the set deadline. The purpose of the quarterly
report is to inform Parliament and provincial legislatures of the names of
municipalities or municipal entities whose financial statements are still
outstanding at the end of this quarter. The report also provides an indication
as to where audits have not been finalised within prescribed time frames and
the reasons why deadlines were not met.
South Africa currently has 283 (2004/05: 284) municipalities. The
Municipal
Finance Management Act (MFMA) requires these municipalities to prepare annual
financial statements and within two months after the end of the financial year,
to which these statements relate, submit the statements to the Auditor-General
or auditing. Of the country's 283 municipalities, 200 which amounts to 71
percent submitted their annual financial statements by 31 August 2006 deadline
compared to 44 percent submissions in 2004/05. Sixty, which amounts to 21
percent of municipalities, submitted their financial statements between 1
September and 31 December 2006.
Even though these are regarded as late submissions, they are a reflection of
an encouraging improvement in relation to the eight percent of the 283 total
municipalities that had not submitted their statements by 31 December 2006
compared to 21 percent that were outstanding as at 31 December 2005. Section
126 (1) (b) of the MFMA also requires that municipalities with municipal
controlled private companies prepare consolidated annual financial statements
incorporating the annual financial statements of the municipality and its
entities.
There are currently 22 municipalities that have control of municipal-owned
entities. Of the 22 municipalities, 12 (55 percent) submitted consolidated
annual financial statements by 30 September 2006 and the remaining 10 (45
percent) had still not submitted their consolidated annual financial statements
by 31 December 2006, compared to 63 percent that were outstanding by 31
December 2005.
Says Auditor-General, Terence Nombembe: "The key attributes of good
governance are accountability and transparency, which are achieved through the
timely submission of financial statements and audit reports. Receiving the
financial statements after the set deadline not only impacts on the ability of
my office to perform its function in this regard, but could impact on the
ability of the municipality to perform within the accountability framework. The
significant improvement in submissions since 2004 and 2005, which was the first
year of the implementation of the MFMA, needs to be sustained in order to
achieve full compliance with the MFMA in the future."
Enquiries:
Africa Boso
Media Liaison: Auditor-General South Africa
Tel: (012) 426 8273
Cell: 082 8899 527
E-mail: africab@agsa.co.za
Issued by: Auditor-General South Africa
19 April 2007
Source: Auditor-General South Africa (http://www.agsa.co.za)
