The number of departments and municipalities who achieved unqualified audit opinions has increased over the past three years, an indication that significant progress is being made in improving financial management in the province.
“Our sense is that although there are still challenges in certain areas, overall the province is on the right path,” Finance MEC Mandla Nkomfe says. He is briefing the National Council of Provinces’ (NCoP) meeting that is currently taking place at the Legislature to discuss the state of local government and service delivery in the province.
As MEC for Finance, Nkomfe is providing a progress report on the implementation of Operation Clean Audit (OPCA) in Gauteng. The meeting forms part of the Gauteng leg of the Provincial Week - a concept of the NCoP - where its members assess progress made by municipalities and the provincial government in delivering services to communities. The focus of this Provincial Week is on assessing progress made on communities previously visited by the NCoP.
“The multiple strategies currently being implemented are yielding positive results; our action plans are addressing audit findings that prevent the achievement of desired results. Another point to make in this regard is that we have eliminated adverse audit findings and disclaimers in our departments, municipalities and public entities,” Nkomfe says.
Last year a total of 92% of departments achieved unqualified audit opinions. Out of 16 public entities; seven achieved clean audits, eight were unqualified (financially unqualified with other matters); only the Gauteng Liquor Board received a qualified report.
“Although we recognise this achievement, our approach is that we must do more. That is why, amongst other things, the Gauteng Provincial Treasury is working closely with the Department of Health to address material issues that result in the failure to achieve a desired audit outcome,” Nkomfe says.
“We need to improve compliance with regulations such as the Public Finance Management Act and Treasury Regulations. This will ensure that our departments move from unqualified to clean audits. Also the internal control environment must be enhancing through the development and enforcement of policies and procedures in areas such as financial and asset management. We continue to work with departments to ensure that this is achieved,” he says.
The provincial government through Treasury is implementing a number of key measures to improve financial management in departments. These include training and development of staff in the Offices of Chief Financial Officers, auditing interim financial statements and Monthly monitoring of expenditure against budget to assist departments in anticipating unauthorised expenditure and putting measures to prevent same.
Interventions in municipalities
Treasury has made direct interventions at municipal level to ensure that financial management improves. “These included placement of acting CFO’s in two municipalities with a dire need for improved financial management - Randfontein and Westonaria, placement of suitably qualified Accountants/Advisors in five local municipalities - Lesedi, Midvaal, Mogale City, Westonaria and Randfontein.
Through the attendance of Audit Steering Committee meetings, OPCA meetings and other intergovernmental relations forums, we ensure that action plans are monitored. Furthermore, we conduct high level technical review of annual financial statements prior to submission to the Office of the Auditor-General and provide municipalities with technical support and advice on an ongoing basis,” MEC Nkomfe explains.
Furthermore Treasury is providing training on pre-determined objectives, monitoring recruitment and retention of critical skills; facilitate the implementation of Human Resource Development and Management Strategy as well as monitoring and support the implementation of Performance Management Systems.
“The provincial government remains committed to assisting and supporting local government towards ensuring sound financial management in municipalities. It is, however, very important to note that accountability still lies with local government as a distinct sphere of government to ensure that it performs and deliver services to communities,” he adds.
Note to editors:
- Unqualified opinion indicates the auditor’s endorsement of the accuracy and adequacy of the disclosed information and of the department’s financial picture as presented
- Qualified opinion may indicate a limited scope of examination, or that the auditor was unable to directly verify certain information
- Adverse opinion indicates serious problems with the audit, and can be very damaging in its effect on the department’s reputation and financial position.
Contact:
John Sukazi
MEC Spokesperson
Cell: 083 772 4885
Email: john.sukazi@gauteng.gov.za
