By Johnathan Paoli
THE general improvement of municipalities in Gauteng has been welcomed by Finance and Economic Development MEC Lebogang Maile, despite a regression in reporting and continued problems in compliance with procurement legislation.
Maile was briefing the media on the outcomes of the audit reports of municipalities across the province at the Gauteng Legislature in Johannesburg on Thursday.
He said that some audit outcomes of municipalities were not ideal and there was room for improvement. The provincial government would continue to work with the Auditor-General, the Gauteng Cooperative Governance and Traditional Affairs Department, the South African Local Government Association and municipalities to foster a culture of an accountable ecosystem and proactively monitor performance.
He said the ultimate objective was to provide support to improve the audit outcomes of municipalities, which had a direct impact on service delivery.
“Stronger fiscal controls will not only improve governance, but they will also allow for more resources to be directed towards critical areas of service deliver, ensuring that we build better and more resilient communities,” Maile said.
He said the Auditor-Genera’s report illustrated that the overall municipal audit outcomes for Gauteng stabilised in the 2022/23 financial year, with seven out of 11 municipalities receiving unqualified opinions.
Maile said that while most municipalities maintained the same outcomes as in the 2021/22 financial year, Ekurhuleni regressed in the 2022/23 financial year, while Tshwane registered notable improvements.
“The City of Ekurhuleni, which received an unqualified outcome with findings in the first year under review, and three consecutive clean audits subsequently, received an unqualified outcome with findings in the 2022/23 financial year. This marks a regression,” Maile said.
He said the number of municipalities within the province who submitted credible financial statements for auditing increased from 33% to 38% in the 2022/23 financial year.
The MEC attributed the improvement to intensified reviews by senior management, internal audit units, audit committees and the provincial treasury, COGTA and Salga.
He said 2023 was the first time that sector departments combined efforts in strengthening the review process.
“This initiative, coupled with the production of interim financial statements, is aimed at improving the quality of reporting by municipalities, resulting in financial statements free from material misstatement and/or omissions,” he said.
Gauteng Treasury Head of Department Ncumisa Mnyani cautioned the media that in terms of audit opinions, an unqualified audit was a truthful reflection of what was
happening in the municipality’s performance. There remained a disjuncture between service delivery and achieving a clean audit.
“The audit only reflects the information the municipality reported is accurate, and honest performance reporting can coexist with failing service delivery,” Mnyani said.
Maile said the Annual Financial Statement Accelerator Programme as well as audit preparation workshops would help improve municipalities’ audit outcomes.
“The idea is to create a culture shift where annual financial statement preparation is viewed as a year-long process informed by daily, weekly, and monthly disciplines,” Maile said.
The MEC said that he was pleased that all the municipalities have managed to submit their draft annual financial statements by the end of August. During the audit, the provincial government would continue to provide support to local government by providing technical astuteness.
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