3 December 2012

South Africa: Kwazulu-Natal On Course to Achieving Clean Audits

press release

Cooperative Governance and Traditional Affairs MEC Nomusa Dube has heaped praise on the leadership of uMtshezi Municipality (Escourt) following their achievement of a clean audit outcome for two years in a row.

In terms of the Auditor-General's (AG) audit report for the year 2011/12, which was handed to the province's municipalities today, uMtshezi has achieved a clean audit.

This municipality was among the five municipalities that were given a clean bill of health by the AG in respect of the 2010/11 audit report.

MEC Dube has also noted that the Indaka Municipality, which has been repeatedly receiving a qualified audit, has now improved to an unqualified audit outcome.

However, MEC Dube has expressed disappointment at the poor performance of other municipalities, but has, in the same breath, said the negative audit performance by other municipalities has given the government an opportunity to draw lessons that ensure that in the future all municipalities can perform positively.

In an attempt to immediately address the weaknesses that have led to the poor audit outcomes, MEC Dube is convening an urgent meeting will all the province's mayors, municipal managers and CFOs, details of which will be announced this week.

The AG's report indicates that for the 2011/12 financial year:

Four-five (45) municipalities have received unqualified audit reports compared to 47 last year;

Eight municipalities received qualified;

Seven municipalities have received disclaimers;

The poor performance by municipalities can be attributed to the following factors in our view:

The year in questions was characterised by the change of guard in the leadership of municipalities since the 2011 local government elections;

This period also coincided with the expiring of contracts of Municipal Managers and some Chief Financial Officers, which created a vacuum and compromised proper decision making;

The province is generally still faced with the shortage of the senior financial management skill, which is a key essential if municipalities are to achieve clean audits;

"Noting the above factors as having contributed to the poor performance, we will, however, draw lessons. Now that we have realised that we encounter weaknesses each time there is a change of leadership due to local government elections, we will now come up with measures to avert such a situation. We are to enhance our efforts to beef up financial prudence in municipalities," says MEC Dube.

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