Improvement in municipal financial performance a result of timely intervention and ongoing support
Gauteng Finance MEC, Mr Mandla Nkomfe has expressed confidence that all municipalities and municipal entities in the province are on course to achieve clean audits by 2014. This comes after the release of the financial audit report by the Auditor-General at the legislature yesterday, which showed a marked improvement in financial performance of municipalities and municipal entities in the province last year compared to the 2007/08 financial year.
A total of nine municipalities received unqualified audit opinions in 2008/09 financial year compared to six in the previous reporting period. 24 municipal entities received unqualified audit opinions in the year under review, up from 20 in 2007/08 financial year.
Amongst other things, the report indicated that in 2008/09, no municipal or municipal entity received adverse audit opinions. In addition, there were no disclaimers in the 2008/09 financial year compared to three obtained the previous year.
Nkomfe says the improvement in the financial performance of municipalities and their entities is a clear indication that the interventions and measures put in place by the Gauteng Department of Finance are beginning to bear fruition.
“We have come a long way, we have gained some ground. Challenges still exist within some of our municipalities but we are satisfied with the progress that has been made and believe that the measures that we have introduced are having a positive effect on the state of financial management at local government. We are certain that clean audits will be achieved by 2014, a deadline that we have set for ourselves,” Nkomfe says.
“I would like to all commend municipalities and municipal entities who have achieved unqualified audit opinions for the work well done. To those who didn’t, I urge you to work hard and I am certain that you will succeed. I call on all municipalities and their entities to stay in close contact with us so that we could provide them with the necessary support in time,” he adds.
The department is working closely with municipalities to help them introduce the necessary reforms aimed at aligning accounting standards in local government with international practices.
This include the transition from fund accounting reporting to generally recognized accounting practice, financial analysis and setting up of internal audit structures and audit committees.
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.
The management and proper utilisation of assets is another key focus area. This year the focus is on assisting municipalities and municipal entities to compile immovable asset registers that meet the minimum requirements as set out in the Public Finance Management Act (PFMA).
Enquiries:
Khusela Sangoni
Cell: 079 510 5408
E-mail: gsscmedia@gauteng.gov.za
Issued by: Department of Finance, Gauteng Provincial Government
5 March 2010
