GP municipalities obtain unqualified audit opinions on financial statements

Only one municipality, Midvaal, obtained a clean audit compared to four in the previous financial year.

FILE: Auditor General Kimi Makwetu. Picture: AGSA.

JOHANNESBURG – All municipalities in Gauteng have obtained unqualified audit opinions on their financial statements, showing the province is moving in the right direction.

Auditor General Kimi Makwetu has reported limited improvements in the audit results of South Africa's municipalities for the 2015/2016 financial year.

However, in Gauteng, only the Midvaal Municipality could hold onto its clean audit status.

The Auditor General says Johannesburg and Tshwane have remained stagnant in the past financial year with unqualified audits.

Only one municipality, Midvaal obtained a clean audit compared to four in the previous financial year.

Ekurhuleni, Sedibeng and Mogale City regressed.

But Makwetu says overall Gauteng should be commended.

“All 100% of municipalities in Gauteng are unqualified and I think it’s something to be commended for the effort in making sure that financial administration in at least all municipalities can be found to be credible.”

Only 49 of the 263 municipalities across the country obtained a clean audit over the past financial year.

However, Makwetu says Gauteng is moving in the right direction.

“It is worth noting that despite the fact that Gauteng has not sustained some of the clean audits they have achieved before, there is not a single municipality that has been qualified.”

Midvaal has been commended for obtaining a clean audit and sustaining the outcome for the past three years.

Meanwhile, irregular expenditure by municipalities has increased in the past financial year to a whopping R16.8 billion.

This is the highest amount since the Auditor General started tracking values.

Makwetu says the top 10 contributors to irregular expenditure were responsible for 42% of the total amount.

“That’s a huge amount of irregular expenditure and it is a combination of the failure of those controls that gives rise to this kind of irregular expenditure. The same for fruitless and wasteful expenditure, this one has at least been contained because it is starting to reduce.”

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The Auditor General says the parliamentary committee responsible for his office is debating whether to grant him more powers, specifically when it comes to dealing with transgressions.

Makwetu says there should be consequences for transgressions and that's why questions about his powers have been raised.

“At the end of an audit cycle, what must follow from there must be a mandatory schedule of issues that have been identified, which must be handed over to an investigative agency.”

(Edited by Winnie Theletsane)