Newsletter 78- Qualified audit reports prevail in municipalities-2 July 2010
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Of the total of 283 municipalities in South Africa, 247 submitted audit reports for the 2008/09 financial year. Out of this total, only four municipalities received clean audits. Altogether 36 municipalities did not submit reports. This was revealed by the Consolidated General Report: Local Government Audit Outcomes 2008/09.
In June 2010, the auditor-general released his Consolidated General Report: Local Government Audit Outcomes 2008/09. The report revealed that in 2008/09 the number of audit reports that were submitted to the auditor-general was 247. A total of 36 municipalities did not submit their reports on time. Out of all the reports that were submitted, only four received clean audits.
In 2008/09 the number of municipalities that received disclaimer reports (in which no opinion could be expressed given inadequate data) was 81, while eight municipalities received adverse reports (noting serious errors). In addition 47 municipalities received qualified reports. The number of municipalities which received financially unqualified reports, but in which other problems were identified, was 107. Only four municipalities received financially unqualified reports or a clean audit opinion. These were Frances Baard District Municipality and Kareeberg Municipality in the Northern Cape, the City of Johannesburg, and the City of Cape Town.
A comparison of the 2007/08 and 2008/09 audit reports is given below.
In 2008/09 more municipalities submitted reports than in the previous year, but many more were late. The number of disclaimer reports decreased, as 29 fewer municipalities received disclaimer reports in the later period. The number of municipalities which received adverse reports also decreased, as three fewer municipalities received adverse reports. The number of municipalities that received clean audits stayed the same - four municipalities in both 2007/08 and 2008/09.
In the later period, 36% of municipalities received adverse or disclaimer audit reports. The minister of co-operative governance and traditional affairs (CoGTA), Mr Sicelo Shiceka, said he aims to achieve no adverse disclaimer audit opinions in all municipalities in 2010 and 2011. He also said that by 2012 at least 60% of municipalities should achieve unqualified audits, 75% by 2013, and 100% clean audit reports by 2014.
Nationally, in 2008/09 the Free State province received the worst audit opinions, which were disclaimer or adverse for 18 (78%) municipalities. The second and third worst were Northern Cape province, with 19 (66%) disclaimer or adverse reports, and the Eastern Cape province, with 17 (47%) disclaimer or adverse reports.
Given the current status of municipal audit reports, the minister’s goal of having 100% clean audits by 2010 is very ambitious.
- Nachi Majoe
