Gauteng commits to better accountability at municipal level

The Gauteng Provincial Government is to intensify efforts for more municipalities and their entities to achieve clean audits.

This follows the release of the Auditor-General’s (AG) general report on the audit outcomes of Gauteng Local Government for the financial year 2010/11.

The results of the report indicate that there was a slowdown in the province’s local government progress towards clean audits as the bulk (71%) of municipalities and entities received unqualified audit opinions with findings while only 5% achieved a clean audit status.

Auditor-General Terence Nombembe remarked: “It is time for local government leadership, assisted by provincial executive and legislature to focus their energies on converting these audit reports to clean. With the right leadership focus, determination and commitment, this is possible.”

According to the report, of Gauteng’s 15 municipalities and 27 municipal entities, there were two clean audits registered at Johannesburg Civic Theatre and Johannesburg Social Housing Company, while six municipalities and four municipal entities received qualified audit opinions. The majority (nine municipalities and 21 municipal entities) received unqualified audit opinions (with findings).

The stagnation in outcomes is due to the fact that around half of the local government political leadership is not taking the Auditor-General of South Africa (AGSA’s) message seriously. In nearly two-thirds of the municipalities there were no consequences for poor performance and a lack of adequately skilled officials in key positions at most of the municipalities.

The report states that the obstacles to attaining clean audits in the province emanate from control weaknesses in supply chain management, service delivery reporting, human resource management, information technology controls and significant errors in financial reports due to a lack of skills in finance units.

Where there are adequately skilled officials, a lack of accounting discipline and disregard for the regular preparation of financial statements results in financial statements that contained significant errors that are discovered and corrected through the audit process.

Sixty-seven percent of the auditees were only able to achieve financially unqualified audit opinions as a result of this process. The department of Local Government and Housing and Provincial Treasury continues to provided skills and technical support on a needs basis to the municipalities.

The Auditor-General has urged mayors and councillors to play an active oversight role in ensuring that key controls are in place and are being implemented to pave the way for clean audits, effective audit committees and internal audit functions to inform strategic thinking for councillors as well as partnerships between municipalities and other key structures (the Provincial Executive, District Municipalities, the Provincial Treasury, Department of Local Government and Housing and the South African Local Government Association (SALGA) to ensure on-going capacity-building.

Premier Mokonyane has assured the Auditor-General of her commitment to work towards clean audits. Mayors, municipal public accounts committees, the provincial Speaker, the MECs for Finance and for Local Government and Housing, as well as other local government structures, have also made a number of commitments to the AGSA to work towards clean audits.

For more information contact:
Xoli Mngambi
Cell: 082 373 1146