It is with pleasure that I present to the Gauteng Provincial Legislature and municipal councils my 2011-12 general report summarising the audit outcomes of local government for the financial year ended 30 June 2012.

Most of the audit outcomes remained unchanged, with the exception of the two auditees that received clean audit opinions. The majority of auditees (79%) received financially unqualified audit opinions with reportable matters on their performance information, noncompliance with legislation, or both these aspects. Material noncompliance findings were reported at 36 auditees (95%), a regression from the 33 (87%) in the previous year. Those auditees that achieved clean audits and improved audit outcomes were influenced by their leadership that successfully implemented and maintained good internal control environments.

The lack of progress to improve audit outcomes was influenced by the regression in the leadership and financial and performance management drivers of key controls, and the fact that the fundamentals of key controls are still not fully embedded as the norm.

Concerns remain regarding the increased number of deficiencies that are not being addressed. This highlights the lack of progress in implementing and sustaining the key internal controls required to ensure the credibility of financial and performance information and support improvements towards clean administration.

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