Mpumalanga shows a mix of sterling and poor audit outcomes
23 Jul 2012
The Mpumalanga province received four clean audits in the 2010/11 local government audit results – the highest percentage of clean audits in the country for this period.
Auditor-General Terence Nombembe attributed the improvement to strong internal controls and management’s implementation of the previous year’s action plans. "With the right leadership focus, determination and commitment, it is possible for the province to attain even more clean audits, but most importantly, to eradicate disclaimers," he said.
Of Mpumalanga’s 21 municipalities, four (19%) received clean audits, namely Ehlanzeni District Municipality, Gert Sibande District Municipality, Steve Tshwete Local Municipality and Victor Khanye Local Municipality. Seven (33%) municipalities were unqualified with findings, while 48% of the municipalities received qualified or disclaimed opinions or had outstanding audits as at 31 January 2012.
The current audit results can be attributed to three underlying challenges that municipal government leadership in Mpumalanga needs to address. Around half (48%) of the local government political leadership is not taking the message of the Auditor-General of South Africa (AGSA) seriously. At 67% of the municipalities there were no consequences for poor performance and at most of the municipalities (81%) officials did not have minimum competencies and skills.
The obstacles to attaining clean audits in the province emanate from control weaknesses in supply chain management, service delivery reporting, human resource management, information technology controls as well as significant errors in financial reports due to a lack of skills in finance units.
This situation is underpinned by the status of key internal controls that require urgent intervention at 28% of the municipalities, with 41% of the municipalities being in the process of improving their internal controls and 31% having good internal controls.
Honouring the commitments given by the leadership would provide an enhanced and clear level of oversight and coordinated monitoring of municipal results by the provincial legislature committees.
Strengthening the coordination between the provincial department of cooperative governance and traditional affairs and the provincial treasury to effectively guide and assist municipalities will also positively impact on the results.
The AGSA’s quarterly municipal door-to-door visits are continuing. These are aimed at monitoring and evaluating the status of improvements and the sustainability of key internal controls and leadership tone that would be a catalyst for the realisation of clean administration in municipalities in the province.
These insights will continue to be shared with the provincial executive and oversight leadership quarterly, to create a platform for forward momentum towards clean audits while also working closely with internal audit units and audit committees.
Ms Tsale Makam, Senior Manager: Media Liaison
Tel: 012 426 9630
Cell: 073 273 1807
Issued by: Auditor-General South Africa
23 Jul 2012
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