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Auditor-General Releases Municipal Audit Report

July 2, 2019

Department of Cooperative Governance and Traditional Affairs

2 July 2019

The cooperative governance and traditional affairs department will support municipalities with the implementation of post audit action plans in collaboration with national treasury.

The department announced this in a statement on the release of the Auditor-General’s Municipal Audit Report.

The Report focuses on the 2017/18 financial year.

It reports that out of 257 municipalities, only 18 have achieved clean audits, a reduction from 33 in 2016/17.

Problems revolve around weak governance, the poor quality of annual financial statements, internal control weaknesses, and performance challenges.

The department agreed with the findings that office bearers, senior management and officials “failed to develop, implement and monitor effective systems and processes of internal control”.

According to the department, the cooperative governance and traditional affairs minister, Dr Nkosazana Dlamini Zuma, welcomed the “improvements outlined by the Auditor General but the overall regression by some municipalities is of serious concern”.

In the report, the AG pointed out that “local government role players have been slow in implementing, and in many instances even disregarded, the audit office’s recommendations”.

The minister expressed concern that there are some municipalities which have not responded positively to address challenges raised by the 2018 report.

Other measures the department is taking to support municipalities include the development and implementation of simplified revenue plans, development of financial recovery plans and credible budgets in collaboration with treasury, supporting intervention on intergovernmental debts including Eskom and Water Boards, enhancing capacity in financial and performance management, intervention via Section 139 of the Constitution for financial and institutional stabilization, setting up governance support teams and vigorous training programmes and empowerment of new Councillors.

The department also indicated that a Rapid Response Technical Team is working with financially distressed municipalities to develop financial recovery plans in order to access Financial Management grants designed to boost capacity.