I hereby present to the legislature of the Limpopo province my 2011-12 general report, analysing the results of the audit outcomes of the district and local municipalities as well as municipal entities for the financial year ended 30 June 2012.

Historically, the local government audit outcomes in Limpopo showed gradual improvement, but the 2011-12 results reflected a regression for the second year in a row with only one municipality (3%) receiving a clean audit opinion and one (3%) receiving an unqualified opinion with other matters. At the root of these outcomes is the slow response by the political leadership to address the root causes for these continued poor outcomes.

The deterioration in outcomes for provincial local government could already be anticipated on receipt of the annual financial statements on 31 August 2012 as the quality of the annual financial statements presented for audit purposes was poor. The Waterberg District municipality (which received a clean audit for three consecutive years) used the preparation of an audit file as a best practice by ensuring that the information in the financial statements is adequately supported. The initiative needed to improve the quality of financial statements is available and merely needs to be replicated by the other municipalities.

Although the province has commenced with a process to appoint competent chief financial officers, there is still a critical shortage of skills and competencies at 72% (87% in 2010-11) of the municipalities. The lack of skills resulted in significant reliance (R51 million) on the use of consultants in the preparation of financial statements at 72% of the municipalities.

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