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Pretoria - Tshwane executive mayor Kgosientso Ramokgopa has objected to Wednesday’s front page headline in the Pretoria News: “Tshwane fails audit” in a report that the city sustained an unqualified audit opinion from the auditor-general.
In a letter, Ramokgopa described the headline relating to a report on A-G Terence Nombembe’s findings, as “fallacious and erroneous”.
Nombembe’s findings, including that only 17 of the country’s 278 municipalities received clean audits, were released at a press conference in Pretoria on Tuesday.
Nombembe said it was unfortunate the metropolitan municipalities had faltered in their crucial role of providing exemplary leadership to smaller municipalities, as not one of the eight metros obtained a clean audit.
There was certainly no malicious intent to harm the reputation of the city leadership in the headline, nor the article, as has been charged, said editor Val Boje. Many other newspapers also reflected on the failure of metros to achieve a clean audit.
Tshwane, for the third consecutive year, sustained an unqualified audit opinion and, according to the A-G’s report, there was an increase in the number of compliance findings reported at the City of Tshwane.
Of the other major metros in Gauteng, Ekurhuleni Metropolitan Municipality also sustained an unqualified audit opinion while the City of Johannesburg did not improve from a qualified audit opinion.
Credit was given to Tshwane for maintaining its status considering the integration of two local municipalities and a district municipality into the City, and for an increase in the number of compliance findings.
Nombembe said it was commendable that, despite the fact that one of the integrated municipalities had previously received a qualified opinion, there had been no regression in Tshwane’s overall audit outcome.
“The integration into the City of Tshwane resulted in all the qualification areas from the prior period being addressed in the 2012 financial year as evidenced by the overall outcomes of the City of Tshwane,” the report stated.
Audits in local government go beyond an audit of financial statements, to reporting of performance against predetermined objectives as well as compliance with laws and regulations. To achieve a clean audit, the local government needs to be unqualified in all audit areas.
Ramokgopa objected to the fact that the Pretoria News report - which had a focus on the city - stated that Tshwane was found “guilty” of various failings.
As correctly pointed out by Ramokgopa, the AG and his report do not establish guilt; he merely raises issues and expresses an opinion, and Boje has acknowledged that the use of the word “guilty” was therefore inapproriate.
Nombembe highlighted a tendency to underspending by municipalities on capital projects and conditional grants from the National Treasury and provincial government which, he said, had an impact on service delivery.
In highlighting a prevalence of underspending on capital budgets, the City of Tshwane and the Housing Company Tshwane were mentioned in the report, along with Johannesburg and Ekurhuleni metros, local municipalities and various other entities.
“Underspending implies that the planned infrastructure projects, including water, sanitation, electricity, roads and solid waste disposal projects, are behind schedule or had not been started at the reporting date. Overall, 17 (45 percent of) auditees underspent their capital budgets by an average underspending of 36 percent, with all three metros underspending by an average of 26 percent,” said the report.
This was a concern as it impacted on assets and infrastructure used in service delivery, the report said.
The report suggested the Department of Local Government and the provincial treasury assist municipalities to identify their HR capacity to manage major capital projects, and measure the existing capacity against the number and value of budgeted capital projects.
Ramokgopa has pointed out that Tshwane had in fact spent 92 percent of its capital budget in the period under review.
A clean audit has these three aspects:
* financial statements are free from material misstatements
* there are no material findings on the annual performance report
* there are no material findings on non-compliance with key legislation.
Local government consists of 278 municipalities:
* eight metropolitan municipalities
* 44 district municipalities
* 226 local municipalities
In addition there are 60 municipal entities.