I hereby present to the legislature and municipal councils of the North West province my 2011-12 general report on audit outcomes of local government for the financial year ended 30 June 2012. The overall outcomes have improved marginally in the North West province, with reported disclaimed or adverse opinions moving from 86% to 81%.

The majority of auditees retained their disclaimed or adverse audit opinions due to their inability to generate annual financial statements which meet the standards and requirements of the accounting framework and are supported by audit evidence and credible financial records. I am encouraged that all municipalities submitted financial statements by the legislated deadline, including 14 backlog financial statements, which means that this report reflects for the first time a complete analysis of local government in the province. This is attributable to the will and commitment of the premier and the member of the executive committee for finance to spearhead initiatives to ensure submission of financial statements by providing resources in the form of consultants to assist municipalities.

Only 4% of key controls had been fully implemented, while 21% were in progress and 75% required intervention. The political leadership was slow in addressing the root causes of poor audit outcomes, which was evident at 96% of the auditees. The status of key focus areas that we looked at as part of our audit, namely supply chain management, human resource management, quality of financial and performance reports and IT controls, is still dire and requires urgent and focused intervention.

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