Municipalities hold their breaths as Auditor-General to release annual audit outcomes
The Auditor General is ready to release the results of the audits of municipalities today, amid deteriorating local government finances and reporting, and the worst municipalities in the Northwest, Free State and Mpumalanga. The financial resources available to municipalities have failed to meet service and infrastructure delivery needs for the past 20 years, hampering the ability of municipalities to fulfill their constitutional mandate. According to the US Local Government Association (Salga), this is exacerbated by limited tax revenue, withdrawn economic growth and rising debt levels. https://www.citizen.co.za/news/south-africa/3060549/polokwane-municipality-produces-fifth-qualified-audit/ The proposed reduction in equity share of R6.5 is of particular concern to the association billion, …
The Auditor General is ready to release the results of the audits of municipalities today, amid deteriorating local government finances and reporting, and the worst municipalities in the Northwest, Free State and Mpumalanga.
The financial resources available to municipalities have failed to meet service and infrastructure delivery needs for the past 20 years, hampering the ability of municipalities to fulfill their constitutional mandate.
According to the US Local Government Association (Salga), this is exacerbated by limited tax revenue, withdrawn economic growth and rising debt levels.
Of particular concern to the association is the proposed reduction in equity share of R6.5 billion, from R84.5 billion in 2019/20 to R78 billion, as well as the 0.4% reduction in MTEF.
This is among the growing number of poor households due to Covid, with Salga noting that the reduction in funding allocation was detrimental to communities in a deteriorating economic climate, facing unemployment and the influence of Covid.
The municipalities’ own revenue collection decreased by municipalities during covid’s locking and the additional R20 billion of Covid’s relief did not match the revenue collected the previous year.
Councilors doing killings
Auditor General Tskanani Maluleke has lamented that local government finances were under pressure but municipalities relied on short-term and costly solutions, such as advisors, to make up for a lack of financial management and reporting skills.
While the number of municipalities achieving qualified audit with no results increased from 20 in 2018-19 to 27 last year, poor audit results still prevail in many municipalities.
There are also concerns about the appointment of unqualified individuals, which has necessitated unnecessary costs for the municipality and the appointment of consultants to prepare Annual Financial Statements.
Last year Maluleke highlighted the recurring use of advisors for financial reporting, as seen by 74% of municipalities, with a total of R5.594 billion spent on financial reporting.
Municipalities spent R4.567 billion on financial unit salaries, flashing a further R1.027 billion on advisors, accounting for 18% of the total reported cost of financing.
Lack of skills and vacancies in the financial units in municipalities were two main reasons identified for the recurring use of advisors.
It will be interesting to see whether the municipality has heeded a call from the Select Committee on Appropriations and the Select Committee on Collaborative Governance and Traditional Affairs, Water and Sanitation and Human Settlements on the municipality to discontinue the use of consultants.
Very good
Anton Bredell, MEC Western Cape for Local Government, Environmental Affairs and Development Planning said they were pleased with the excellent audit results for West Cape municipalities for the 2020/21 financial year.
He said they received 22 unqualified inspections, with no results, five unqualified with results, and only three qualified inspections.
“If we compare these results with the previous audit, we see 24 unchanged results, 5 improved municipalities, and only one municipality has lagged behind in performance,” Bredell said.
Mireille Wenger, MEC of the Western Cape of Finance and Economic Opportunity, said these are the second best audit results in the Western Cape since 2015, and shows that the Western Cape continues to lead good governance nationally.
He said that sound financial management of municipal resources was a prerequisite for economic growth, leading to job creation and that good audit results were an integral part of good governance.
“There is also a direct link between clean audits and service delivery. The challenge is to adopt procedures and systems that maintain this quality no matter who the individuals in charge are, ”added Wenger.
siphom@citizen.co.za
Municipalities hold their breaths as Auditor-General to release annual audit outcomes Source link Municipalities hold their breaths as Auditor-General to release annual audit outcomes
