Improvements of Local Municipality Audit Outcomes

  • Hon. Speaker,
    Hon. Members,
    Members of the Gallery,
    Comrades and Friends.

    I would like to take this opportunity to reflect on the general report on the audit outcomes of the nation and provincial governments, with special reference to the Free State Province.  Hon. Speaker, the biggest portion of government spending, with total budgeted expenditure of the national and provincial governments was R1 035 billion in 2013-14.  Hence the municipalities receive such scrutiny and criticism from the opposition parties.  However, they fail to acknowledge the improvements made not only at national level but also here in our own backyards.

    Hon. Members, the Auditor General indicated that the 2013-14 audit outcomes reflected an improvement.  Furthermore, positive movements have been identified in the following areas;

    • Fair presentation and the absence of material misstatements.  Material misstatements refer to errors or omissions which affects the credibility and reliability of financial statements.
    • Useful and reliable measurement and reporting by auditees on their performance in the annual performance report accordance with the predetermined objectives in their annual performance plan.
    • Compliance with key legislature governing financial matters. 

    Hon. Speaker, the improvements in the audit report is apparent;   119 which amounts to (25%) of the 469 auditees attaining clean audit outcomes compared to 22% in the previous year.  According to the Auditor General, 40 departments and 79 public entities (nationally and provincially) in this category have demonstrated controlled environments characterized by strong leadership control, good governance and financial and performance management controls that prevent, detect and correct errors and non-compliance. 

    Hon. Members, I am pleased that according to the Audit outcome of the Free Sate Municipalities, that there has been a significant improvement in the last 7 years.  Allow me to provide an over view;

    • During 2007/08 financial year, only 2 municipalities (7%) achieved unqualified with findings. 3 municipalities (11%) received qualified with findings and 21 municipalities (78%) received Disclaimed with findings.
    • 7 Years later, the 2013/14 financial year indicates the significant improvements with; 12 municipalities (45%) received unqualified with findings.  While 6 municipalities (22%) received qualified with findings, and 9 municipalities (33%) received disclaimed with findings.

    Hon.  Speaker, through the engagements with the Auditor General, the following recommendation have been made in the areas of; Political and Administrative leadership, Investment in Skilled Staff, Discipline, Credibility, Performance Management Systems, and Governance relating to internal audit, audit committees and municipal public accounts committees (MPACs). 

    Hon. Speaker the ANC led-government has confidence that continuous efforts by municipal officials will continue.  The ANC led-government welcomes all recommendations made and we trust to see further improvements of municipalities’ nationwide and especially here in the Free State province.

    Thank you.

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