Auditor General (AG), Tsakani Maluleke, says the office of the AG remains committed to assisting municipalities to improve, following a reported regression of clean audits in the 2022/23 local government audit outcomes.
On Tuesday, Maluleke briefed the Portfolio Committee on Cooperative Governance and Traditional Affairs on the consolidated general report on local government audit outcomes 2022/23.
Outcomes of the municipalities (including those finalised after 31 March 2024) are as follows:
• 34 clean audits
• 110 unqualified with findings
• 90 qualified with findings
• 6 adverse findings
• 14 disclaimed with findings
• 3 outstanding audits
In a media statement following the briefing, it was revealed that only 34 of South Africa’s 257 Metropolitan, District and Local Municipalities received clean audit outcomes.
“While 45 municipalities have improved their audit outcomes since 2020-21 [which was the last year of the previous administration’s term], 36 have regressed,” Maluleke said.
The AG explained that municipalities with clean audits display sound financial management practices.
“They generally manage projects well so that deficiencies are identified and rectified promptly and so that timelines, budgets and quality standards are adhered to.
“The well-functioning control environment and good systems present at these municipalities form a solid foundation from which councils can prioritise further improving the performance and service delivery of their municipalities,” Maluleke said.
Direct impact
The AG lamented that poor financial stability and controls have a direct impact on the lives of communities living in municipalities.
“Wasted money and resources means reduced funding for service delivery priorities and, eventually, a greater burden on taxpayers. The lack of credible reporting on performance and finances weakens not only municipal accountability processes, but also the council’s ability to assess the municipality’s performance or to make decisions in response to underachievement.
“These continuing failures in the most critical part of municipal operations are not receiving the necessary attention from the elected leadership,” she said.
Pressing further, Maluleke implored council leaderships to take action.
“Service delivery improvements and the responsible use of the limited funds available will only be enabled when municipalities are capable, cooperative, accountable and responsive, and when they deliver on their mandates.
“Municipal leadership, councils and mayors play a critical role in setting the tone for ethical behaviour, good governance and accountability; and in creating a culture that fosters trust and confidence in local government,” the AG said.
Pockets of improvement
There was a reported improvement in the timely submission of financial statements by municipalities during the 2022/23 financial year.
The number of municipalities submitting on time improved from some 81% in 2020/21 to 94% in 2022/23.
“The improvements were due to accounting officers responding positively to our material irregularity notifications on this matter as well as provincial government supporting municipalities to act on commitments made to submit financial statements on time.
“Financial statements again being submitted late, or not at all, were the main reason for us not completing the 2022-23 audits of 10 municipalities by 31 March 2024. Seven of these audits have since been finalised,” Maluleke noted.
Furthermore, fewer municipalities received disclaimed audit opinions.
“Over the administrative term, 18 municipalities, mostly in KwaZulu-Natal, Mpumalanga and North West, have moved out of this category. Fourteen municipalities received disclaimed opinions in 2022-23, including two municipalities whose audits were finalised after 31 March 2024, which was the cut-off date for this report.
“The AG commended the support provided by the provincial government to municipalities in the 6th administration and called for it to be sustained in the 7th administration as this support demonstrated positive signs of improvement,” the AG’s office said in a statement.
Maluleke invited municipalities to take up the assistance offered by her office to assist municipalities.
“We remain committed to partnering with and supporting the local government accountability ecosystem through our audits, the use of our expanded powers as granted by the Public Audit Act amendments, and the many initiatives that we have implemented to assist and guide all role players,” she concluded. – SAnews.gov.za
