Johannesburg municipal offices at Braamfontein.
Picture: Motshwari Mofokeng
744 13.08.2013 Johannesburg municipal offices at Braamfontein. Picture: Motshwari Mofokeng

Big metros fail latest audit

Time of article published Aug 14, 2013

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Johannesburg - Only 17 of the country’s 278 audited municipalities received clean audits for the past financial year - and big metros don’t even make the 5 percent that fared well in the Auditor-General’s books.

In fact, the big metros of Joburg, Tshwane, Ekurhuleni, eThekwini, Cape Town and Nelson Mandela Bay - which between them account for more than R170 billion of the municipal budget - received qualified audits. None received clean audits, a trend that worries Auditor-General Terence Nombembe.

“The metropolitan municipalities faltered in their crucial role of proving exemplary leadership to smaller municipalities…,” he said in Pretoria yesterday when presenting his 2011/12 audit into the performance of municipalities.

The report paints yet another grim picture of the state of municipalities - it reveals that only 5 percent of municipalities have, for the third year running, received a clean bill of health in their audits.

The A-G completed the audits of 317 (94 percent) of the 338 municipalities. His report shows they spent R370 million on external consultants, including auditors.

Of concern was the fact that the overall audit outcomes showed regression “as 41 auditees improved (while) 50 regressed”.

“The progress towards clean audits has been slow, with the number of clean audits remaining at the same low level of 5 percent in the past three years.”

Another worrying trend was that almost all of those audited and that got a clean audit were municipal entities, rather than municipalities themselves, Nombembe said.

The reasons for the porous audit reports were not new: a lack of skilled personnel, such as chief financial officers and municipal managers, in strategic positions.

Internal control deficiencies in the supply chain control management also accounted for some of the poor financial reports.

“At 73 percent of the auditees, vacancies in key positions and key officials without the minimum competencies and skills continue to make it difficult for these auditees to produce credible financial statements and performance reports,” Nombembe said.

To fill this gap, 71 percent of those audited depended on consultants to assist with financial reporting, Nombembe said, also expressing concern that municipalities were not using the available skills development opportunities.

He called on the councillors of 76 of the municipalities that were slow in addressing poor audit outcomes to seek support from national and provincial governments in their pursuit of knowledge and skills.

“They (councillors) must also effectively and ethically apply the leadership skills that earned them the trust of their communities.”

Nombembe added that there was a “critical need to strengthen the municipal public accounts committees and support the important role they play”.

Decisive action had to be taken against political leaders and officials who deliberately ignored their duties and disobeyed the law, as their “transgressions” led to poor service delivery.

“Transgressors should be decisively dealt with through performance management and by enforcing the legislated consequences for transgressions,” he said.

The A-G took solace “in the exemplary (audit) results” of the three municipalities that improved. These are George, Langeberg and Mossel Bay, in the Western Cape, as well as municipal entities like the Johannesburg Fresh Produce Market, the Durban Marine Theme Park and the International Convention Centre in Durban.

Deputy Minister of Co-operative Governance and Traditional Affairs Andries Nel was visibly embarrassed by the report, which he described as “thorough and meticulous”.

“I think the picture the report paints is one that cries out for intervention at local, provincial and national levels. It doesn’t make for pleasant reading,” he said.

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The Star

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