Pretoria - The consolidated 2012/13 report on Local Government audit outcomes has been released.
The report, which is based on the Municipal Financial Management Act, showed a slight improvement in the audit outcomes over the last five years.
“There were 63 improvements in different categories of audit outcomes and the regressions are starting to shrink with 25 (categories),” said Auditor-General Kimi Makwetu.
This was Makwetu’s first report since his appointment some seven months ago. His office is tasked with strengthening South Africa’s democracy by enabling oversight abd accountability through auditing.
Speaking at a media briefing on the report on Wednesday, Makwetu said that the municipalities audited have a combined total expenditure of R268 million, which is broken down into R62 billion for employment, R166 billion for goods and services, and R40 billion in capital expenditure.
Some 319 audits were completed and of these, 22 municipalities and eight municipal entities achieved clean audits. This is an increase of 9% compared to the 5% in 2012.
“Over the last five years, there’s been a decline in the adverse opinions and disclaimers,” said Makwetu.
Fifty-nine institutions received disclaimed audit opinions and eight received adverse opinions.
While the Auditor-General has released a positive report, he highlighted that supply chain management and irregular expenditure are still a concern.
The report found R11.6 billion in irregular expenditure for the period under review.
“Eight billion of this is in respect of goods and services that were received. The only remaining risk is that those remaining institutions did not go through a transparent process; that is, the R3.6 billion of the balance could not be verified,” Makwetu said.
The Western Cape, Gauteng and KwaZulu-Natal were the best performing provinces in general.
Makwetu, who met with the leadership of the country in the form of premiers, MECs of finance and local government, said he was encouraged by their tone and commitment.
“We hope that this will translate into actions,” said Makwetu.
Cooperative Governance and Traditional Affairs Minister Pravin Gordhan, who also spoke on behalf of Finance Minister Nhlanhla Nene, welcomed the report.
“We welcome the Auditor-General’s report and we commit ourselves to taking proactive action,” said Minister Gordhan.
Getting things right
Minister Gordhan said that the results indicate progress in the right direction.
Currently, local municipalities are spending R700 million on private sector consultants in one way or another.
“There is still a significant use of external service providers to try and fix their financial management discipline,” said Makwetu.
Fraud and corruption, particularly in local government, remains a concern for government.
“We are concerned about fraud and corruption in local government. All the role players need to do a lot more to discourage people from this kind of conduct,” said Minister Gordhan.
The minister also emphasised that “not all irregular expenditure is corrupt expenditure”.
While the report shows that there are some improvements compared to the previous financial year, the Auditor-General called on government leadership to intensify the drive towards good governance. - SAnews.gov.za
