Legal compliance is still a major obstacle to good governance, according to Lebogang Maile, the MEC for Finance and Economic Development for Gauteng.
The majority of municipalities, he observed, continued to violate the procurement laws, a fact that the auditor-general, Tsakani Maluleke, exposed recently.
Maluleke found a number of common problems, such as irregular, wasteful, and unauthorised spending, difficulties managing expenditures, and substantial inaccuracies or limitations in the annual financial statement submission.
Maile pointed out that there has been discernible improvement in spite of these problems. Municipalities were looking into instances of wasteful, irregular, and unapproved spending.
Promoting good governance
According to Maile, municipalities’ established disciplinary boards are in charge of handling cases of financial misconduct.
He emphasised that council committees, particularly those dealing with municipal public accounts, should promote good governance and make sure these disciplinary boards are doing their jobs well.
“In aid of credible annual financial statements, the Gauteng provincial treasury has embarked on operational plan support and monitoring activities.
“These include efforts to improve the financial reporting control environment,” said Maile.
“On a quarterly basis, the team responsible assesses whether municipalities comply with the Municipal Finance Management Act.
“These assessment reports identify opportunities for improvement within the financial reporting control environment.”
He continued by saying that the provincial treasury is investigating whether all 11 municipalities have carried out the action plans that were created in response to the audit findings from the prior year.
According to Municipal Finance Management Act Section 131, these plans were necessary.
Additionally, the team was required to assess the effectiveness of audit committees, internal audit operations, and governance structures on a quarterly basis.
City of Ekurhuleni
He observed that the City of Ekurhuleni’s audit outcome demonstrated a decline as it resulted in an unqualified finding.
This outcome, he clarified, shows that the financial statements of the city are free of material errors.
However, there were issues with their performance reporting, legal compliance, or both.
A clean audit, on the other hand, shows that the financial statements of the municipality are totally accurate.
There are no issues regarding performance reporting or legal compliance.
This distinction reflects a more thorough and positive outcome by highlighting the differences between an audit with findings and one without.
The City of Johannesburg, Lesedi local municipality, West Rand district municipality, and Sedibeng district municipality all reported unqualified audits.
The City of Tshwane made improvements to reach the qualified state.
