5 % of Municipalities receive clean audit reports

Johannesburg – Six municipalities have joined the ranks of municipalities with clean audits this year, bringing the total number to 13.

Terence Nombembe, the Auditor General

This was revealed by Auditor General (AG) Terence Nombembe on Monday, during the release of the Consolidated General Report on the Audit Outcomes of Local Government 2010-11.

The 13 municipalities represent 5 % of South Africa’s 343 municipalities. The municipalities with clean audits were in KwaZulu-Natal, Limpopo, Mpumalanga and the Western Cape.

All of the country’s eight metros received qualified reports, while 13 % of municipalities did not submit on time – a trend the AG strongly feels needs to be eradicated.

“We last saw this trend six years ago,” said Nombembe.

According to the results, 156 out of the total of 343 (or 45 %) of municipalities have obtained financially unqualified audit reports. The unqualified audit reports were obtained after corrections during the audit process and with help from auditors.

For the rest of the municipalities, 18 % received financially qualified results, 19 % received adverse opinions or disclaimers, while 13 % of municipalities had not submitted their financial results in time for auditing.

In a few provinces like the North West, Northern Cape and Western Cape, audits had not been finalised in time for inclusion in the AG’s report.

None of the municipalities in the Eastern Cape, Free State, Gauteng, Northern Cape or North West received clean audit reports.

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Skills and errors in the financial information itself are some of the issues highlighted by the AG.

“Three areas need attention, namely ….issues of people not being able to do their work. Another is leadership,” said the Nombembe, adding that there was sluggishness in responding to issues.

“The trend of disclaimers that is continuing, what are its consequences? We need to put more focus on that,” said Nombembe.

The Auditor General’s office also took note of a lack of minimum competencies of over 70% of officials in key positions.

Both Cooperative Governance and Traditional Affairs Minister Richard Baloyi and Finance Minister Pravin Gordhan noted the report.

“We are, however, gravely concerned about municipalities that received disclaimers,” said Gordhan.

Gordhan further added that enforcement mechanisms would be effected in the municipalities that did not act within the prescripts of the law. On the issue of supply chain management, a chief procurement officer, as announced in this year’s budget, would be soon appointed.


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