Durban — The SA Local government association (Salga) hosted sessions in Durban on Tuesday to assist KZN municipalities to submit accurate, clean and reliable annual financial statements (AFS).
The municipalities would have to submit their annual financial statements by August 31 hence the sessions to iron out errors and discuss challenges that internal auditors and municipal financial management often come across.
The sessions were attended by municipal officials involved in AFS, internal auditors and chief financial officers (CFOs).
Specialist Mthandeni Langa analysed deficiencies in the annual financial statements and challenges in the submission statistics of the previous annual financial statements.
The timely submission and quality of financial statements was 28%.
Langa further tabled the AFS reviews and the findings as follows:
• AFS not received timeously for reviews;
• Lack of expertise and legislation;
• Internal capacity constraints on staffing.
“The reasons as to why the consultants were ineffective is because their work was not adequately reviewed, inadequate or with no records and documentation; poor project management and consultants not delivering,” he said.
The material misstatements in financial statements stats revealed that irregular expenditure was 28%, property, infrastructure and equipment 25%, receivables 25%, expenditure 25% and revenue from exchange transactions at 24%.
The chairperson of the Chartered Institute of Government Finance, Audit and Risk Officers, Sibusiso Zakwe said the findings by the AG highlighted serious deficiencies in government. He said poor governance, instability, lack of knowledge, disregard of the law by councillors and under-qualified staff had been some of the problems.
He further urged internal auditors to make sure that the AFS submitted to the AG were of good quality. “Internal auditors can we please make sure that the annual financial statements submitted to the AG are of good quality; we believe that these sessions will assist the auditors on what to look at when they are reviewing their AFS.”
Mseni Ntombela from Salga said they supported these initiatives because they were all about good governance and service delivery.
“The AG says there is little value from what we have invested; that impacts on the financial reports, so we encourage that we take these sessions seriously,” said Ntombela.
Amanda Botha from the Accounting Standards Board took the municipal officials dealing with finance, auditors and the CFOs present through new policies in accounting that were effective from April 1, 2022, to March 31, 2023.
Daily News