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Audit findings of Limpopo munis, agencies no pretty picture


Matters pertaining to collapsed internal control measures and non-compliance with legislation stand out among factors that generally trigger alarm in the summary of issues affecting the audit findings of Limpopo municipalities and aligned agencies for the 2015/16 financial cycle. The scenario created by the findings released on the state of local government affairs in the province does not sketch an overall appealing picture.
Despite the audit findings of 22 of the 33 local and district municipalities as well as related agencies in the province having improved and six of them remaining unchanged, there seems to be no reason for celebrating the latest Auditor-General (AG) findings for the time being. The remainder of municipalities were perceived to be faltering in the achievement of the bigger goal of Limpopo institutions obtaining clean audits.
News that may bode well for residents of Limpopo’s capital is that Polokwane Municipality achieved an unchanged unqualified audit opinion for a second consecutive year, as opposed to disclaimers of previous years. South African Local Government Association (Salga) Provincial Executive Officer Thapelo Matlala ascribed it to capable officials being brought on board and the leadership style of Executive Mayor Thembi Nkadimeng, who is showing a keen interest in financial matters.
Of the 30 audited local and district municipalities and three agencies – Polokwane Housing Association, Sekhukhune Development Agency and Greater Tzaneen Economic Development Agency – the findings of 22 remained unchanged. Six of the 33 institutions – Sekhukhune Development Agency, along with Ephraim Mogale, Fetakgomo, Greater Tzaneen, Maruleng and Tubatse local municipalties – improved on their audit outcomes of the past financial year, whereas Ba-Phalaborwa Municipality regressed.
Late submission, strike action impact on audits
In some instances – that of Greater Giyani, Mogalakwena and Thabazimbi local municipalities – the audit reports were apparently still outstanding due to annual financial statements received late and AG’s technicalities, while the financial statements of Mutale Municipality were not submitted, because of ongoing strike action during the year under review.
Thirteen local and district municipalities received unqualified with finding audit opinions, seven got qualified audit opinions, while Vhembe District Municipality as well as Ba-Phalaborwa and Mogalakwena local municipalities got disclaimers and adverse findings the result of the assessment of the financial affairs of Mopani District Municipality.
In taking Polokwane Observer through a summary of the municipal audit outcomes for 2015/16, Matlala first analysed the findings of the district municipalities. In doing so he raised the point that Capricorn District Municipality’s unqualified audit findings have remained the same when compared to the previous financial year. Also the audit finding of Sekhukhune District Municipality remained the same with the institution achieving an unqualified audit opinion a second consecutive year. They were satisfied with the municipality’s performance given the history of disclaimers for around a decade prior, Matlala stipulated. He continued mentioning that Waterberg District Municipality had yet again achieved an unqualified audit opinion and didn’t have the challenges the other district municipalities battled with, such as transactions pertaining to a water service delivery authority or asset management.
Adverse opinion for Mopani, disclaimer for Vhembe
In the case of matters pertaining to the books of Mopani District Municipality, which got an adverse audit opinion the past financial year, he said it required special attention. According to Matlala the main contributing factor was that the municipality was a water service authority and revenue either didn’t get transferred, the books were not getting reconciled or information on such transactions was not available. Vhembe District Municipality’s disclaimer, much of a similar situation the past half a decade now, was largely blamed on administration instability and strategic positions not being filled, Matlala said. He expressed the confidence that the situation would change during the next financial year with a new mayor at the helm.
Although there has been a general improvement in the AG outcomes of municipalities in the province, it did not call for celebration as yet but for a lot of work that still needed to be done, he emphasised. He was of the opinion that the overall problem was that historic issues were not being attended to and were standing over from the previous year. According to Matlala improvement strategies were starting to yield results, but municipalities had to build on those strategies.
A positive contributing factor was that Premier Stan Mathabatha had taken it upon himself to monitor the performance of municipalities in terms of financial management, he said. In addition Salga, in partnership with the Department of Provincial Treasury and the AG’s Office, had focused on key stubborn issues in financial management, such as legacy issues and assets, during its previous Finance Week.
Matlala pointed out that the audit opinions were already being tabled by the different councils and municipalities were acting on remedial action as stipulated in the AG’s management letters identifying issues to be rectified. According to him most municipalities were finalising their audit action plans with no specific deadline set for implementation thereof, but they had to report to the Departments of Cooperative Governance, Human Settlements and Traditional Affairs (Coghsta) and Provincial Treasury. Matlala said the cut-off date for submission of annual financial statements in compliance with the Municipal Finance Management Act was 31 August this year.
Audits on local govt summit agenda
He referred to Salga planning on hosting a breakfast ceremony in due course to award municipalities which improved on their audit outcomes and instead of their annual Finance Week would subject mayors and councillors responsible for matters of finance through intense one-week training in the light of them being fairly new still. He concluded with the remark that improvement in audit outcomes would also be on the agenda of next week’s local government summit to be hosted by Coghsta.