Lapses in councils’ audit outcomes

THE auditor-general’s latest report into the Western Cape’s 30 municipalities have shown a regression in audit outcomes, compared to 2015/2016.

The total irregular expenditure incurred in the province was R173 million (2015/2016: R174m), R163m of which related to non-compliance with supply-chain regulations.

The AG’s business executive responsible for the Western Cape Sharonne Adams said the latest report sought to empower oversight structures and executive leaders and help them focus on those issues which will result in the delivery of reliable financial statements, and credible reports on service delivery as well as compliance with key legislation.

The Western Cape audit results come after AG Kimi Makwetu announced the consolidated local government outcomes in May.

Adams emphasised that “not all municipalities took our messages and recommendations seriously”.

In addition, Adams said “some auditees did not demonstrate the required levels of accountability and governance”.

“During 2015/2016, we urged the political and administrative leadership to strive to improve accountability, good governance and consequence management, to attain and improve clean administration.

“Notwithstanding the provincial leadership’s continued commitments every year, we were disappointed that our message on risks and recommendations was not given the attention it warranted, which contributed to the regression in 2016/17,” Adams said.

Instead of being proactive, the AG’s officials found that municipalities were relying on the audit process to produce credible financial and performance reporting, and that the quality of submitted financial statements regressed slightly with four sets of financial statements (14%) requiring material adjustments to avoid qualifications, compared to three (11%) in the previous year.

Only one of the four municipalities was able to successfully correct their misstatements and attain an unqualified opinion on their financial statements.

As a result, two municipalities regressed from financially unqualified opinions with findings to a disclaimed opinion (Beaufort West) and a qualified opinion (Laingsburg).