Auditor-General Mr Kimi Makwetu recently presented his 2012-2013 general report on local government audit outcomes to the Legislature of Mpumalanga.
As regards the Lekwa Municipality the use of consultants resulted in the improvement of the outcome.
The municipality continued to rely on the services of consultants to help with the preparation of financial statements, at a cost of R3 277 000.
The consultants reviewed the transactions during the year and corrected all identified errors, while also ensuring that the filing system was in order.
The financial statements were prepared by consultants, but there was no transfer of skills.
If the consultants were to leave, the audit outcome of the municipality might regress.
The municipality was not in a good financial position, as they delayed payment of creditors and overspending of the operational budget and under spending of conditional grants remained a challenge.
In addition, the municipality’s current liabilities were more than its assets.
The following controls must also be strengthened to create a controlled environment that supports reliable financial and performance reporting and compliance with legislation.
• The municipality should improve the skills and competency levels of existing staff by offering training programmes and short courses on Generally Recognised Accounting Practice to empower them.
• The municipality should implement effective HR management to ensure that adequate and sufficiently skilled officers are in place and that their performance is monitored.
Role players should address the root causes of poor audit outcomes and inadequate controls as follows:
• The council and mayor should lead by example in responding to recommendations by oversight bodies and the external auditors.
• The municipal manager should fill section 56 manager positions and all other key positions with skilled employees, who would be able to develop and monitor action plans to address the current findings.
There has however been some improvement in the last few years where the municipality has been disclaimed with findings, but they were qualified with findings last year.
Altogether 89% of households have access to electricity, 98% have access to piped water and 96% have access to toilet facilities.
“Inadequate monitoring of compliance with legislation on supply chain management resulted in 85% of the municipalities having material findings on non-compliance, while the amount of unauthorised, irregular as well as fruitless and wasteful expenditure increased by 35%,” Mr Makwetu said.
