No clean audit in five years for North West

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The Auditor-General’s 2014/15 municipal report, released this week, shows transgressions committed with impunity in North West.

The province’s 23 municipalities failed to yield a single clean audit in the past five years, leaving the provincial leaders with nothing to take credit for – despite improvements shown over the years.

Although much was expected from the political leadership – in terms of policing bad financial management practices, in line with legislative policy – the province did not make the grade.

Out of disclaimers expressed in 17 of the province’s municipalities in the 2010/11 report, improvements were recorded in only six municipalities in the latest report.

Auditor-General Kimi Makwetu expressed concern at what he called “the lack of political will” to hold officials accountable for poor performance.

“The increased noncompliance in specific focus areas, such as procurement and contract management, has been a direct result of blatant disregard for legislation on the part of transgressors.

“There was a lack of investigations, and disciplinary steps were not taken against those responsible, and those who continue to transgress.

“Municipal leadership lacks the political will to intervene and take decisive action against repeat offenders and transgressions,” Makwetu lamented.

He said that in the past financial year, municipalities incurred irregular expenditure of R4.2 billion.

Since management had failed to quantify the full extent of the transgressions, this amount was understated by at least R3.5 billion, probably because much had been concealed in a bid to attract a positive audit outcome, Makwetu said.

“We also continued to experience limitations in testing [tender] awards, which is indicative of the absence of preventative and detection controls over supply chain management and possible fraud. Management would rather have their audit outcomes qualified because of a limitation than provide the documents that could implicate them in possible irregularities.”

In reaction, the North West local government department told City Press that the recent municipal audit outcome was an “unwelcoming” development, despite the fact that “specific areas that require attention had been identified for intervention and consistent support”.

“Noting that both political and administrative leadership levels are currently being mobilised to produce clear action plans ... [there will be] firm measures and milestones aimed at achieving clean audit outcomes in the next cycle,” the department said.

The province could not explain why the report noted that the Auditor-General had expressed “unqualified with findings” opinions in six municipalities – up from three in the period under review (from the 2010/11 to the 2014/15 financial years). With regard to the “qualified with findings” opinion, the number surged from three municipalities to 10 over the same period.

Meanwhile, at national level, adding to the bleak picture of the provinces’ municipal finance management ratings was Rustenburg, which topped the five municipalities listed as the main contributors to irregular expenditure in 2014/15 – at R3 billion from R195 million in 2013/14.

And for unauthorised expenditure, Madibeng municipality in Brits led the pack at R1.2 billion.

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