July 2015

Municipalities getting it right, improving services

Written by Amukelani Chauke
More and more municipalities are managing their finances better, which is translating into better service delivery for communities.

Auditor-General Kimi Makwetu recently announced a comprehensive report on audits that were done on municipalities and municipal entities for the financial year 2013/14.

The report showed that the number of municipalities that improved their submission of financial statements had increased notably across several provinces.

The Auditor-General said that the total number of municipalities and municipal entities with unqualified audits went up from 30 in the 2012/ 13 financial year to 58 in 2013/14, which is made up of 40 (14 per cent) of the 268 municipalities and 18 (32 per cent) of the 57 municipal entities.

Auditor-General Kimi Makwetu said the best performing municipalities have improved lives.Makwetu said he was impressed with the work of the best performing municipalities as they had improved the lives of people.

After completing the audits, he visited several municipalities that did well to congratulate them. While he was there, he visited several municipal projects to see how improved results impacted on service delivery in the KwaZulu-Natal, Western Cape, Mpumalanga, Gauteng and the Eastern Cape Province.

“The political and administrative leadership accompanied me and my team on visits to some key projects, where they provided us with detailed information on how these projects are managed for the benefit of local communities.

“I was impressed by the sterling work that these municipalities, some in the remotest parts of our country, are doing to have a positive impact on their communities,” he said.

Makwetu added that the municipalities that have shown that good governance controls can be effectively used to improve the lives of people and that the political and administrative leadership was starting to set the right tone and leading by example.

Audit results welcomed

Cooperative Governance and Traditional Affairs Minister Pravin Gordhan said the improved municipal audit results showed that government prioritised good governance and service delivery.

“The report points to a steady trend towards good governance and sound financial management.

“This reinforces more efficient and accountable basic service delivery in line with the ‘Back to Basics’ approach,” he said.

The Minister launched the “Back to Basics” strategy in September 2014 as government took the approach of ensuring that municipalities get basic services right, as well as listen to concerns from the public more effectively.

Years of steady improvement

Forty-one per cent of all auditees received unqualified audits audits with findings in the year under review, compared to 40 per cent in 2012/13 financial year.

A unqualified audit with no findings means a municipality’s books were in order and that there were no errors on its financial reporting; they met their service delivery targets based on their promises; and they complied with legislation when handling public funds.

An ‘unqualified audit with findings’ means a municipality was able to present financial statements with no errors, but failed to meet all their targets and did not set clear targets or indicate which legislation they used to manage funds.

The results showed that 22 per cent were ‘qualified with findings’ in the year under review, compared to 28 per cent in 2012/13 financial year.

This means that municipalities were unable to produce reliable financial statements or comply with financial management legislation. 

Sixteen per cent of municipalities and municipal entities obtained ‘disclaimers with findings’. This means the municipality’s financial records were so bad that the Auditor-General could not even express an opinion.

How provinces fared
  • Eastern Cape: The Sarah Baartman District and Senqu Municipality improved to unqualified audits, while the Mandela Bay Development Agency retained its unqualified audit.
  • Gauteng: Ekurhuleni Metro, Midvaal, Mogale City, Brakpan Bus Company, Joburg City Theatres, Ekurhuleni Development Company, Johannesburg Roads Agency, Lethabong Housing Institute, Pharoe Park Housing Company and Germiston Phase II Housing Company – all got unqualified audits.
    The Sedibeng District, Joburg Market and Johannesburg Social Housing Company retained their unqualified audits.
  • KwaZulu-Natal: Dannhauser, Emnambithi/ Ladysmith, Ezinqoleni, ICC Durban, Ilembe District, Mandeni, Richmond, uMgungundlovu District, Umzumbe, Zululand District, Ilembe Management Development Enterprise and Ugu South Coast Tourism received improved (unqualified audits).
  • Northern Cape: The Frances Baard District was the only one that improved to an unqualified audit, while the ZF Mgcawu District retained its unqualified audit.
  • Mpumalanga: The Enhlanzeni District and Steve Tshwete Municipality retained their unqualified audits.

No municipalities or entities achieved unqualified audits in the Free State, Limpopo and North West.

Rural development
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