Msunduzi gets clean audit

2008-01-31 00:00

THE Msunduzi Municipality is elated after having received a clean audit, a vast improvement on the previous year’s qualifications and adverse opinion from the Auditor-General.

Last year’s report highlighted corruption, fraud and non-compliance with municipal legislation. The A-G declared the council’s audit to be one of the worst in the province, giving the municipality a much-needed push to overhaul municipal financial management.

This year’s audit was unqualified, but the A-G emphasised areas of concern in a report on the financial statements and performance information for the year ended June 30, 2007.

The A-G found that the municipality has no risk management and fraud prevention policy as required by the Municipal Finance Management Act, and found material misstatements in the financial statements submitted by council in August 2007.

No provision was disclosed for the landfill site rehabilitation, resulting in an increase in that provision and a decrease in the accumulated surplus by R22 million. A lump sum of R45 million allocated to the stated benefits provision had been reversed. The future cost of retired employees’ medical aid expenses had not been provided for, resulting in an increase of the provision and a decrease in the accumulated surplus by R45 million.

Several municipal supply chain management regulations were not adhered to, as no calls were made for verbal and written quotations, and a report on the implementation of the supply chain management policy was not submitted. The municipality’s financial and risk management systems were not transparent, effective or efficient.

The Auditor-General also found that internal audit staff did not sign certificates declaring their independence of the section being audited and there was no audit training and development at the municipality during the year.

Despite these points of concern, Msunduzi municipal manager Rob Haswell said the municipality has every reason to be pleased. “We have set a good standard for ourselves, but this is no reason for us to be complacent. We can and must improve further, for without secure financial controls we cannot deliver,” said Haswell.

He conceded that the municipality is not fully compliant with legislation, but assured council that this will be rectified prior to the next audit. Council is in the process of adopting a risk management policy and a fraud prevention strategy. Other concerns raised by the auditor-general are being investigated.

thabi@witness.co.za

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