Gauteng Finance MEC Mr Mandla Nkomfe congratulates municipalities in the province for significantly improving their performance in the period 2006 to 2011 the third term of a democratic system of local government in South Africa.
This comes after Premier Ms Nomvula Mokonyane on Tuesday released a comprehensive review of local government performance in the province. Amongst other things the report indicates a marked improvement in financial management with the number of municipalities who received favourable audit opinions reaching 73%.
"This shows that we are on course to achieve our goal of ensuring that all municipalities and municipal entities in the province receive clean audits by 2014. Prudent management of resources is important. When resources are used correctly there will be no wastage; because funds will be channelled towards the delivery of high quality public services to communities," Mr Nkomfe said.
The mandate of the Gauteng Department of Finance (GDF) includes providing guidance and leadership in the implementation of financial management reforms for both provincial and local government.
Mr Nkomfe attributed the improvement in financial management in municipalities to support programmes developed by Gauteng Provincial Government (GPG) to enhance the capacity of local government in the province.
In the period 2006 to 2011, GDF worked closely with municipalities to assist them to introduce the necessary reforms aimed at aligning accounting standards in local government with best practices.
"We are proud that the province of Gauteng has improved in a number of municipalities that received unqualified audit opinions, and we did not receive any disclaimer and/or adverse audit opinions for the 2009/10 financial year," Mr Nkomfe said.
Mr Nkomfe added that this was achieved through a number of interventions that the province introduced in support of municipalities, these include:
- The deployment of suitably qualified accountants in municipalities to support and assist in financial management;
- Introduction of the first ever Gauteng Municipal Internal Audit Forum, where best practices around the role of internal audit and audit committees were shared;
- Participation in the Accounting Standards Board Public Sector accounting forum, to stay abreast of the latest changes in accounting, particularly Generally Recognised Accounting Practice standards so that we can roll out the information to Gauteng municipalities.
Since 2009, GDF has convened quarterly Municipal Chief Financial Officer’s forums which precede the Municipal Finance Indabas (MFI). These intergovernmental platforms have enhanced communication, planning and coordination in the implementation of the financial management reforms as required in terms of the Municipal Finance Management Act both at an administrative and governance level.
"The MFI concept has gain support and created great enthusiasm amongst stakeholders within local government. It has become a key platform which empowers municipalities and enhances political oversight by addressing current pressures and providing assistance in mapping the path forward in building financially sound and viable municipalities," Mr. Nkomfe said.
The latest MFI was held in April, where discussions focused on the state of revenue and debt management, local government fiscal policy imperatives, achieving a balance between revenue protection and customer protection, maximising operating budget to improve efficiencies, as well as pressing issues around water conservation and demand management.
As a result a Gauteng Debt Management Committee has been established and has facilitated payments between provincial departments and municipalities for basic services rendered amounting to approximately R1 billion. A Grant Management Committee was also established to facilitate, manage and monitor transfer payments to municipalities by the province.
Recognising that risk management is a strategic function that must be considered in decision making processes of the local sphere of government, GDF put in place the Gauteng Municipal Risk Management Forum.
"This is a platform for risk practitioners in municipalities to constructively engage on risk management, share best practices, and to highlight the role and importance of effective risk management in municipalities," Mr Nkomfe explained.
In addition, ongoing assistance is provided to municipalities to enhance financial management capacity, including workshops and training to assist with preparation and interpretation of annual financial statements, cash flow management and projection, and internal controls.
"Our efforts show that we are committed to building a local government system that is developmental in the way it provides services to communities, and is accountable and responsive to the needs of those communities," Mr Nkomfe added.
Source: Gauteng Provincial Government
