Zero political influences, decisive leadership, hiring the right people and compliance with the Municipal Finance Management Act, as well as daily compliance with supply chain management processes, are some of the issues Members of Parliament (MPs) want to see addressed in order for municipalities to improve their audit outcomes.
This is what Portfolio Committees told the nine Local Government MECs who appeared before Parliament this week. The MECs briefed various Committees of Parliament on what they planned to do in order to improve their audit status, as contained in the 2010/11 report of the Auditor-General (AG). The AG’s report revealed that only 13 of the 258 Country’s municipalities received clean audits.
The main reasons given were a lack of appetite from leadership to take action against non-delivery, political interference in tender processes, awarding of tenders to friends and family, hiring people with no relevant qualifications and disregard of supply chain management principles.
Despite improvements in some municipalities who were in the red but were now moving closer to the green, the MPs did not want a repeat of the past year’s performances- for example, the Francis Baard District in the Northern Cape which regressed from Unqualified with no matters to report, to “Qualified”.
Nyandeni local municipality in Eastern Cape also regressed from an unqualified opinion, to a disclaimer.
The MECs heard that something had to be done about stagnant municipalities who consecutively get qualified audits, disclaimers or adverse opinions “with no improvement”. Most of the MECs agreed with the findings and told the MPs that they had plans in place to deal with the challenges. They reported that auditing firms had been hired to assist in the finance and budgeting offices, to ensure accurate budgeting and submission of credible financial statements, amongst other things.
Most municipalities had established Municipal Public Accounts Committees (MPACs) and Audit Committees, they said, and these were functioning in municipalities.
On the score of hiring adequately qualified personnel, the MECs said that rural municipalities were mostly affected by this, as it was difficult to attract and retain highly qualified and skilled employees. They said they were doing their best to address this, among other things with consultants who would transfer skills.
While MPs appreciated the establishment and functionality of MPACs and Audit Committees, they wanted the MECs to ensure that members serving in these Committees were trained and made to understand what exactly their responsibilities were.
Members of the Select Committee on Cooperative Governance said they would want to attend MPACs meetings “just to see how these committees conducted their business and to listen-in on what issues get to be discussed in these meetings”.
