SA’s terrible municipal audits

musterbstIt was announced on Tuesday that only seventeen of South Africa’s 278 municipalities have received clean audits for the financial year 2011-2012.

The Auditor-General (AG) Terence Nombembe released the latest report in Pretoria.

It showed that while a handful of municipalities performed better than the previous year, the majority remained in the red.

Along with the 278 municipalities, a further 60 municipal entities are included in the results.

Of those which received clean audits, only three municipalities and three municipal entities improved their results over the previous year to achieve a clean audit, while just over 30 others improved their results, but remained negative.

The three successful municipalities, George, Langeberg and Mossel Bay, are all in the Western Cape.

A further 50 auditees regressed from their previous year’s results.

The majority maintained mostly negative results from previous years.

None of the country’s eight metropolitan municipalities managed to secure a clean financial bill.

The AG’s office said metros were setting a bad example to their smaller counterparts.

“Unfortunately, the metropolitan municipalities faltered in their crucial role of providing exemplary leadership to smaller municipalities.”

Nombembe says the high vacancy rate in municipalities is partly to blame, saying a lack of chief financial officers (CFO’s) in municipalities is particularly problematic.

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

Clean audits have now been sitting at a level of five percent for the past three years.

Earlier this year, Nombembe warned that billions were being spent on consultants to do work that should be handled internally.

It appears the trend has remained, sending expenses spiralling among more than two thirds of municipalities simply for consultants handling financial matters.

The report is Nombembe’s last as AG as his seven-year contract will expire in November.

Parliament has begun the search for a replacement. – EWN