Preventative controls and quick consequence administration are wanted in Gauteng municipalities as a result of it isn’t at a stage the place it could enhance their audit outcomes.
The province’s municipalities have been characterised by a decline in audit outcomes in contrast to the primary two years of the earlier administration’s time period.
The Auditor-General of South Africa’s appearing enterprise unit chief for Gauteng, Dorothy Rampopo, says the institutionalising of those controls and enforcement of timeous consequence administration in municipalities must be improved.
She was talking at a briefing the place she unpacked the Gauteng Municipal Finance Management Act No. 56 of 2003 (MFMA) audit outcomes. Only two municipalities obtained and sustained clear audit opinions. Audit outcomes initially noticed municipalities produce good high quality monetary statements with Gauteng the one province with out unfavorable monetary outcomes.
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Managers in Gauteng municipalities have to be accountable
“We urge councils and municipal public accounts committees to maintain municipal managers accountable in order that funds are used to allow high quality fundamental service supply. Going ahead, we are going to carefully monitor the commitments from key provincial leaders.
“This includes the premier’s commitments to provide greater oversight of municipalities through the provincial cooperative governance and local government department, and the provincial treasury, to establish a war room focusing on improving municipal outcomes and use the premier’s coordinating council to drive consequence management and accountability with the goal of having a sustained impact on service delivery.”
The provincial treasury has additionally dedicated to conducting inner audit opinions at municipalities, coaching provide chain administration officers and municipal public accounts committee members, and intensifying assist to struggling municipalities.
She mentioned over the previous three years, municipalities noticed {qualifications} rising, with Rand West City receiving a certified opinion for the second consecutive yr in 2020-21, whereas Merafong City didn’t submit monetary statements by the legislated date and regressed to an adversarial opinion.
“It is commendable that the City of Ekurhuleni sustained a clean audit outcome for two years in a row and Midvaal for the past eight, as this indicates sound governance practices, institutionalised disciplines and effective preventative controls.”
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Everyone have to be vigilant
Rampopo mentioned to realise important enchancment in outcomes, all position gamers in the native authorities accountability ecosystem ought to diligently play their half to guarantee accountability for authorities spending and enhancing service supply in addition to the standard of life for South Africa’s residents.
“Councils and municipal public accounts committees must hold municipal managers accountable so that funds are used to enable quality basic service delivery.”
Rampopo famous that there’s a important reliance on the audit course of to produce high quality monetary statements, even if Gauteng has entry to an abundance of expert personnel, particularly at metro stage.
Of the 11 statements submitted for municipalities, six wanted to be corrected by the audit course of, with an extra two municipalities receiving certified and adversarial opinions, respectively. “If the audit process did not provide this opportunity, the province would only have been able to produce three unmodified opinions.”
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Money spent on consultants in Gauteng municipalities
Gauteng spent R919,11 million on consultants for sure components of monetary reporting since 2016-17, with the City of Tshwane Metro spending most of this quantity to produce a compliant fastened asset register.
“It is of great concern that material corrections on fixed assets had to be made in the submitted financial statements. Our call is that municipalities need to ensure that expenditure on consultants is done prudently with adequate monitoring, including ensuring that there are adequate skills transfer from consultants to officials.”
Rampopo added that they shouldn’t be launched late in the method, however to institutionalise the disciplines all year long to guarantee the method is efficient and satisfactory worth is derived.
“We have seen a regression in performance reporting, as eight municipalities (City of Johannesburg, City of Tshwane, Sedibeng, West Rand District, Emfuleni, Lesedi, Mogale City and Rand West City) did not publish credible performance reports, which negatively affected the ability of both municipalities and residents to properly assess services promised to by the administration.”
The City of Johannesburg and the City of Tshwane incurred a mixed R3,82 billion (85% of the entire at municipal stage) in irregular expenditure, whereas City Power incurred R1,03 billion (50% of the entire at municipal entity stage). These quantities signify 5%, 19% and 20% respectively of those auditees’ adjusted complete capital and operational budgets (excludes expenditure on salaries and bulk purchases).
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Irregular expenditure
“Irregular expenditure increases the risk of funds meant for service delivery being misused. We again call on oversight structures to ensure that they promote a culture of accountability and consequences by fast-tracking investigations into unauthorised, irregular, and fruitless and wasteful expenditure and holding those who are liable to account,” Rampopo says.
“We remain concerned about non-compliance with legislation in the province, with little improvement year-on-year. Consequently, the closing balances of unauthorised, irregular, and fruitless and wasteful expenditure continued to increase, mainly due to additional amounts being incurred and the previous balances not being investigated promptly and resolved.”
The monetary well being of all municipalities in the province remained regarding, she identified, as income assortment remained poor, regardless of post-covid-19 restoration measures being carried out. “In recent years, the three metros, which are responsible for 88% (R120,54 billion) of the provincial local government budget and service approximately 4,82 million households, have used listed bonds as part of their funding model.”
Rampopo warned that the latest downgrade by scores companies will make it harder and dear for them to get hold of the capital they want for key infrastructure tasks.
The poor monetary place of some municipalities additionally contributed to low ranges of spending on upkeep of infrastructure belongings with most nearing and/or exceeding their helpful lives, which negatively affected the standard of providers acquired by residents.
