The Western Cape, once again, sustained its status as the only province to record a high number of clean audits in the municipal audit report.
However, as Auditor-General, Kimi Makwetu noted with great concern, the province achieved this with a great regression percentage compared to the previous financial year’s (2016-2017) outcomes.
Why did Western Cape municipalities perform poorly?
Only 12 out of 30 municipalities registered clean audits in the Western Cape. This is a sharp fall since, in 2016-2017, the total stood at 21.
This means that a total of nine municipalities regressed and failed to address the recommendations set out by the AG.
Moreover, 89% of the province’s municipalities recorded financial unqualified statements. While this is admirable, it regressed by 3% compared to the previous financial year’s outcomes.
“We have observed that the lapses in controls in certain municipalities in this province were largely non-adherence to statutory submission dates of financial statements for audit, non-adherence to supply chain requirements in confined areas already identified and actioned by management only after the audit,” Makwetu explained.
Irregular expenditure also shot up by a whopping R502-million. While this raises eyebrows, Makwetu noted that there was no apparent system breakdown or indications of collusion in the province’s books.
“We do not believe that these lapses or control deviations are indicative of a systematic breakdown in the systems of internal control, however, the report had to reflect the occurrences to prevent management complacency,” he added.
“Accountability in local government in decline” – Makwetu
Looking back at what was a tedious and, at times, dangerous process, Makwetu concluded that there is no recourse for accountability in local government.
His office’s recommendations are largely ignored and processes are flouted on a consistent basis. In essence, the AG stated that “accountability for financial and performance management continues to deteriorate”.
Much of this is expected to change in the case of financial audits carried out from the period exceeding 1 April 2019. This is after amendments to the Public Audit Act were passed, giving the AG more authority in recourse actions taken for failure to adhere to recommendations.
“Once a recommendation is made through an audit such will be required to be effected within a period prescribed by the auditors, failing which, a binding remedial action will be issued by the auditors to the accounting officer to correct the identified material irregularity, also within a prescribed period.
“The last recourse, after all the above steps are exhausted, will be for the Auditor-General to consider initiating a process that would trigger a certificate of debt in the name of an accounting officer or accounting authority associated with such material irregularity, once all the relevant, appropriate evidence has been secured,” Makwetu stated.