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Only seven out of SA's 237 municipalities received “clean” audit reports, says Auditor-General Terence Nombembe. Ten of the 49 municipal entities in the country received “clean” audit reports.

Nombembe released the consolidated general report on Wednesday, which summarised the audit outcomes of all the country's municipalities and related municipal entities. The report found that there was a marginal improvement in this year's results, “fractionally better than the previous year”.

Municipalities with clean administrations, as measured by the audit reports, were Mpumalanga's Ehlanzeni district municipality, Steve Tshwete and Victor Khanye municipalities, the City of Cape Town, the district municipalities of Metsweding in Gauteng and Frances Baard in Northern Cape and the local municipality of Fetakgomo in Limpopo.

The ten municipal entities that achieved clean audit reports were Amathole Economic Development Agency in the Eastern Cape, Gauteng's Brakpan Bus Company, Erwat, Joburg Property Company, Johannesburg Civic Theatre, Johannesburg Social Housing Company, Lethabong Housing Institute, the Roodepoort Civic Theatre and the Cape Town International Convention Centre and Overstrand Local Economic Development Agency in the Western Cape.

Nombembe said it was worth noting that of the municipalities reported on, 57 had improved on their 2008-09 audit outcomes but that 15 had regressed and 165 remained unchanged, while the audit outcomes of 12 of the 49 municipal entities reported on improved, two regressed and 32 remained unchanged.

Among other financial management issues that needed to be addressed by municipalities and municipal entities, the auditor-general raised concerns with regard to non-compliance with supply chain management prescripts, the extent and prevalence of ICT challenges, the ongoing need for and dependence on consultants to deliver financial statement-related work that full-time employees should be doing and the increased level of unauthorised (total 4,969 million rand) and irregular (total 4,135 million rand) expenditure.

Nombembe cautioned that for Operation Clean Audit 2014 to succeed, SA's mayors needed to lead the movement towards the clean administration of their municipalities. Operation Clean Audit is a government initiative aiming towards clean audits in all its spheres by 2014.

Nombembe said that improved municipal audit outcomes required a partnership that should be led by the mayors, but involved the inputs that the municipal accounts committees, provincial structures such as the Provincial Departments of Cooperative Governance and Treasuries were able to provide.

The technical tools to support municipalities towards clean administration were abundantly available, Nombembe said. He suggested that what was lacking in most municipalities was the strong will of leadership to bring about the necessary change by ensuring that action plans and checklists to address previous years' audit findings were developed and implemented to the letter.

The auditor-general's office developed and implemented quarterly reviews and tracking systems that alerted mayors and their administrations about matters of financial management, governance and leadership in their municipalities. - I-Net Bridge