Johannesburg - The government is unlikely to meet its target of achieving clean audit opinions from Auditor-General Kimi Makwetu in all 278 municipalities and provincial departments this year.
A confidential report by the Co-operative Governance and Traditional Affairs Department shows that in 2012/13 only 48 percent of municipalities and municipal entities obtained unqualified audits.
According to the report, seen by The Sunday Independent this week, adverse audit opinions and disclaimers, a key milestone of Operation Clean Audit 2014, have not been eliminated.
Operation Clean Audit 2014 was launched in July 2009 by Sicelo Shiceka, who was the minister of co-operative governance and traditional affairs at the time.
Only Gauteng, KwaZulu-Natal and the Western Cape achieved last year’s target of at least 75 percent of municipalities in a province getting clean audits.
In the Western Cape, 85 percent of municipalities obtained clean audits, 84 percent in Gauteng and 77 percent in KwaZulu-Natal.
Limpopo was the worst-performing province, with only 6 percent of its municipalities obtaining unqualified audits. Just 22 percent got clean audits in the Northern Cape.
Free State, Eastern Cape, Mpumalanga and North West got between 30 and 34 percent.
The Co-operative Governance Department blames unresolved legacy issues, political instability, the high vacancy rate in positions of chief financial officers and a lack of capacity in internal audit units, inadequate functionality of audit committees, poor asset management and non-functioning municipal public accounts committees for the financial problems.
Last week The Sunday Independent reported that four of the country’s eight metropolitan municipalities had failed to get clean audits.
The situation looks similarly bleak for the national department responsible for municipalities.
Makwetu has revealed that the Co-operative Governance Department racked up R503.3 million in irregular expenditure in 2012/13, the most by any department.
More than R418m of that expenditure was only discovered by the auditor-general during his audit.
Together, the five worst departments – the others being Public Works, Correctional Services, Transport and Defence – had nearly R2 billion in irregular expenditure.
Makwetu has also revealed that municipalities across the country failed to spend up to 69 percent of conditional grants, which are allocated by the national government to provinces but must be spent according to conditions set down by the government for programmes of national importance.
According to the Co-operative Governance Department, R2.5bn of the R13.8bn municipal infrastructure grant allocated to municipalities in 2012/13 was not spent.
More than half (R1.4bn) was not spent in Limpopo (R980m) and Mpumalanga (R444m).
The grant provides finance for basic municipal infrastructure for poor households, micro enterprises and social institutions.
Hlomane Chauke, general secretary of the Association of Public Accounts Committees, said it was important for municipalities to have capacity in financial management, as well as skilled oversight bodies able to do their work.
He said that the leadership in municipalities should take the responsibility of informing communities of Makwetu’s findings and ensuring adherence to the law.
Many municipalities did not even have basic record-keeping systems, Chauke said.
Sunday Independent