Another clean audit for Ilembe

The iLembe District Municipality and its controlled entity Enterprise iLembe received its third consecutive clean audit report from the Auditor-General for the 2015/2016 financial year.

Audit Manager Hlengiwe Phewa from the Auditor-General KZN offices revealed this last week at a council meeting held at the Council Chambers in Ilembe House, KwaDukuza.

Prior to 2009/2010 iLembe had a history of receiving a Qualified Audit Opinion with the municipality having achieved its first Unqualified Audit Opinion for the 2009/10 financial year. The District was able to maintain this trend for the 2010/11, 2011/12 and 2012/13 financial years.

For 2013/14, 2014/15 and 2015/16 financial years the municipality received a Clean Audit outcome.

At the same council meeting the Mayor of Ilembe Cllr Siduduzo Gumede reported on the Mid-Year Budget Assessment and performance for the year 2016/2017. This was the first assessment of the annual budget under review for the incoming council at office.

The Mayor said that there were various achievements that came with the first half of the financial year following the challenges the District is facing.

“Some targets were not achieved due to the effects of the severe drought which negatively impacted municipal revenues. As a result, this led to certain funds to be reprioritized and non-service delivery projects to be suspended,” he said.

Commenting on the clean audit report, Cllr Gumede said this was a progressive accomplishment.

“We are proud for having achieved clean administration in three consecutive years together with the municipality entity, Enterprise iLembe. We are encouraged to continually ensure sound financial management within local government,” said the mayor.

He also revealed that the mid-term performance of the District showed slight improvement in revenue collection.

“The liquidity of the municipality is still under pressure and care should be exercised to maintain healthy cash flows,” he said.

Cllr Gumede said the budget would be adjusted to accommodate latest projections, stating that as council, they are closely monitoring the strict measures to restrict unnecessary spending.

Auditor-General terminology explained

The Auditor-General can express one of the following audit opinions:

• Clean Audit Outcome: Financial statements are free from material misstatements (in other words, a financially unqualified audit opinion) and there are no material findings on reporting on performance objectives or non-compliance with legislation.
• Financially Unqualified Audit Opinion: Financial statements contain no material misstatements. Unless AG expresses a clean audit outcome, findings have been raised on either reporting on predetermined objectives or non-compliance with legislation, or both these aspects.
• Qualified Audit Opinion: Financial statements contain material misstatements in specific amounts, or there is insufficient evidence for the AG to conclude that specific amounts included in the financial statements are not materially misstated.
• Adverse Audit Opinion: Financial statements contain material misstatements that are not confined to specific amounts, or the misstatements represent a substantial portion of the financial statements.
• Disclaimer of Audit Opinion: The auditee provided insufficient evidence in the form of documentation on which to base an audit opinion. The lack of sufficient evidence is not confined to specific amounts, or represents a substantial portion of the information contained in the financial statements.

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