10 most important findings on the audit results of local government.

By Drum Digital
02 June 2016

The auditor-general, Kimi Makwetu, has reported on the audit results of South African municipalities over the past five years from 2010-11 and 2014-16.

By Ayanda Sitole

The findings show a great improvement, with the number of municipalities receiving clean audits increasing from 13 to 52 in that period of time.

However, during this period 13% out of 36% of municipalities regressed in their financial credibility, with Makweta saying questions have been asked about what the money they are receiving is being spent on.

“This will determine the level at which services are being delivered to the public,” he says.

David Van Rooyen, minister of Cooperative Governance & Traditional Affairs says part of the responsibility of ensuring financial stability in municipalities lies in the hands of citizens.

He encourages South Africans to priorities paying their rates and utilities to municipal entities.

Van Rooyen says much progress has been made which is shown in the local government audit results, but believes more can be done.

Here are the 10 most important findings on the audit results of local government.

  1. Provinces with the highest proportion of clean audits are The Western Cape (73%), Gauteng (33%) and Kwa Zulu Natal (30%)
  2. Limpopo, North West and the Northern Cape have produced the most disappointing results with the AU saying they need to strengthen their governance systems
  3. Consultancy costs for financial reporting services increase over the five years to R892 million in 2014-15
  4. Weaknesses in the panning and appointment process, performance management and monitoring and transferring of skills were identified at 68% of the municipalities that used consultancy services.
  5. Irregular expenditure, which is expenditure that was not incurred in the manner prescribed by legislation has more than doubled in the past 5 years to R14.75 billion
  6. Municipalities in the North West, Mpumalanga, Eastern Cape and Limpopo were the main contributors to the increase in irregular expenditure.
  7. Fruitless and wasteful expenditure, which is expenditure that was made in vain and could have been avoided is more than R1 billion higher than it was in 2010-11 at R1.34 billion
  8. Mpumalanga, Eastern Cape, North West, Free State and Northern Cape were the main contributors to fruitless and wasteful expenditure.
  9. Unauthorised expenditure, which is expenditure that was incurred without provision being made for it in the budget increased threefold to R15,32 billion.
  10. The main reason for unauthorised expenditure remains overspending of the budge, 60% to non-cash items that were not correctly budgeted.

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