Media releases

Gauteng local government to increase drive towards clean audit

Local government’s progress towards clean audits in Gauteng had a setback, with five of the municipal entities that had achieved clean audits at the Johannesburg Metropolitan Council having regressed to unqualified audit opinions, leaving only two municipal entities with clean audit status in 2011. Also noteworthy is the elimination of the disclaimers of audit opinion that were received in the previous year at the Tshwane Metropolitan Council.
At Gauteng’s 15 municipalities and 27 municipal entities, there were two clean audit opinions at the Johannesburg Civic Theatre and the Johannesburg Social Housing Company (5%), while 95% of the municipalities and municipal entities received either unqualified opinions with other findings or qualified audit opinions. This is a clear indication that the majority of municipalities could, with extra effort, migrate towards clean audits.
There is an opportunity in Gauteng to reverse the slow progress in outcomes at municipalities, which is due to the fact that at nearly 50% of municipalities, the political leadership is not taking ownership of the internal control shortcomings as pointed out by the Auditor-General of South Africa (AGSA). At nearly two-thirds of the municipalities there were no consequences for repetitive neglect of internal control disciplines that result in the stagnation of municipal performance. Other than the chief financial officer (CFO) positions that are substantially filled with adequately skilled personnel, there is a need to look into skills levels of other officials in key positions within the finance and other departments at 70% of the municipalities.
A significant effort needs to be made to address all the obstacles towards attaining clean audits in the province, which emanate from little or no progress in dealing with control weaknesses in supply chain management, service delivery reporting, human resource management, information technology controls as well as significant errors in financial reports due to a lack of skills at finance units and a lack of basic discipline in financial management.
The provincial treasury, the provincial department of local government and housing and the South African Local Government Association (SALGA) need to enhance the support and monitoring of municipalities to ensure ongoing capacity building. There is also a need for sustained cooperation between the provincial public accounts committee and the portfolio committee on local government to deal with the challenges in local government.
The AGSA municipal door-to-door visits are continuing on a quarterly basis, with a view to monitoring and evaluating the status of improvements and sustainability of the key internal controls and leadership tone that would be a catalyst for the realisation of clean administration at municipalities in the province. These insights will continue to be shared with the provincial executive and oversight leadership quarterly, to create a platform for movement towards clean audits while also working closely with internal audit units and audit committees.
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MEDIA NOTE: The General report on the MFMA provincial audit outcomes of Gauteng is available on www.agsa.co.za.
ABOUT THE AGSA: The Auditor-General of South Africa (AGSA) is the country’s supreme audit institution. It is the only institution that, by law, has to audit and report on how government is spending taxpayers’ money. This has been the focus of the AGSA since its inception in 1911 – the organisation celebrated its 100-year public sector auditing legacy last year (2011).

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