Share

Only nine new municipalities out of 263 achieved clean audits - AG report

Pretoria – There was little improvement in the local government audit outcomes report for the year 2015/16, with fewer municipalities achieving clean audit opinions.

This auditor general local government report was released on Wednesday. The report shows the audit outcomes of 263 municipalities and 51 municipal entities. Auditor General Kimi Makwetu spoke on the findings at a press briefing in Pretoria.

The report showed that 14 municipalities lost their clean audit opinions and only nine joined the category of clean audits. A total of 49 municipalities achieved clean audits.

The provinces with the highest proportion of municipalities with clean audit opinions were the Western Cape (80%), KwaZulu-Natal (18%) and the Eastern Cape (16%).

The Western Cape increased its clean audit opinions from 73% in the previous year to 80%.

Gauteng was the only province to receive unqualified audit opinions on its financial statements. The Midvaal municipality was the only one to keep its clean audit status.

The Eastern Cape, Limpopo and Mpumalanga showed improvements while North West, Northern Cape and Free State delivered the poorest audit results.

Irregular expenditure on the up

Weak systems of internal control impacted the financial health of municipalities. The auditor general considers 65% of municipalities’ financial health as concerning or requiring intervention. This is higher compared to the 60% recorded for 2014/15.

Irregular expenditure increased by over 50% to R16.81bn, the highest since the auditor general started keeping a track record. This could be higher, as a third of municipalities indicated that the full amount was unknown and 24% were qualified as the disclosed amount was incomplete, explained Makwetu.

"Irregular expenditure does not necessarily represent wastage or mean that fraud has been committed,” he said. “This needs to be confirmed through investigations.”

Fruitless and wasteful expenditure was 21% lower than the previous year. Despite the drop, a number of municipalities incurred this expenditure, said Makwetu. Fruitless and wasteful expenditure incurred by the Eastern Cape, Limpopo and North West decreased. 

Unauthorised expenditure remained at almost the same level as the previous year, at R12.77bn. The report indicated over 55% of the overspending is related to non-cash items. These are estimates of depreciation and impairment which were not correctly budgeted.


SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox

Read Fin24's top stories trending on Twitter:


We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.0%
Rand - Pound
23.90
+0.0%
Rand - Euro
20.41
+0.1%
Rand - Aus dollar
12.33
+0.1%
Rand - Yen
0.13
-0.0%
Platinum
908.05
+1.2%
Palladium
1,014.94
+1.3%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders