South Africa: Western Cape, Gauteng Municipalities Singled Out for Good Financial Management

Auditor-General Kimi Makwetu says the Western Cape and Gauteng are two out of the nine provinces that developed characteristics of good governance.

Makwetu said this when he released his report on the audit outcomes of municipalities on Wednesday.

"Just looking at the map at a glance, you will see that the Western Cape and Gauteng are effectively the two provinces with municipalities that have developed characteristics of good financial management that have maintained disciplines of accurate and transparent reporting, that have been able to produce evidence with regards to a number of transactions that they have entered into and have reported on in the financial statements," he said.

According to the Auditor-General's report, Gauteng was the only province in which all the municipalities had unqualified audit opinions, but as in prior years, only Midvaal obtained a clean audit opinion.

This, however, continued to elude the other municipalities due to good financial accounting but inadequate monitoring of the preventative controls necessary to ensure compliance with legislation and accurate reporting on service delivery achievements.

The report also revealed that the largest concentration of clean audits remained in the Western Cape (45%), with 93% of the province's municipalities receiving unqualified opinions on their financial statements.

Eight municipalities retained their clean audit status - six of which have maintained this status for the past five years or longer.

"However, if you look at the picture with regards to the rest of the other seven provinces, it is a mixed bag and I am sure you will not escape the dominant number of municipalities with [qualified findings] and [disclaimer with findings].

"When the auditors scrutinise these financial statements of the lot of these municipalities in the seven provinces, barring the Western Cape and Gauteng, we found a significant number of control failures when it comes to the disciplines of financial management," he said.

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