Northern Cape Coghsta bemoans poor audit outcomes | News24

Concern has been expressed over the recent consolidated general report on local government audit outcomes for the 2022-’23 financial year.

This concern was raised by MEC Bentley Vass of the Northern Cape Department of Cooperative Governance, Human Settlements and Traditional Affairs; and Transport Safety and Liaison.

It comes after Auditor-General (AG) Tsakani Maluleke in her latest briefing to the Portfolio Committee on Cooperative Governance and Traditional Affairs on the audit outcomes of municipalities for the 2022-’23 financial year, said there was little to celebrate nationally, with the Northern Cape being no exception.

Budgets must be better aligned

Vass said in a statement the service delivery in 26 local municipalities in the province was notably poor.

“Only two municipalities, Kgatelopele and Renosterberg, showed significant improvement, transitioning from disclaimed audit opinions to qualified opinions. Kgatelopele’s improvement was credited to skilled appointments in key positions, while Renosterberg’s progress was due to effective measures implemented by the Department of Coghsta staff.”

Vass said despite some improvement in annual financial statement submissions, four municipalities did not meet the deadline for auditing – and another 13 could not publish credible reports.

A hopeful prospect is that some municipalities improved slightly.

“It emphasises the need for increased compliance. In an upcoming meeting we aim to address audit outcomes and develop action plans to tackle identified challenges.

“The Frances Baard, Namakwa, and ZF Mgcawu district municipalities achieved unqualified audit outcomes with no findings, earning clean audits. Interventions and expedited recruitment for senior management roles have already begun in some municipalities.”

Vass said they needed to continue support to enhance service delivery and address the AG’s recommendations for better audit outcomes.

Officials must better align budgets and service delivery plans with community needs, he believes, and he urged councils to monitor performance closely to ensure corrective actions were taken promptly.

Root causes highlighted

Only 3 of the 31 Northern Cape municipalities had clean audits, 6 had unqualified reports with no findings, 17 had qualified reports, 2 had disclaimers and 3 had outstanding statements. Some 11 municipalities (39%) had no findings on performance reports, while 25 municipalities (89%) had findings on compliance with legislation – and Maluleke’s office issued 27 material irregularity (MI) notifications.

The root causes for the poor performance are: slow response from management and the political leader on oversight (68%); instability and vacancies (39%); that some 7% had key officials who did not have appropriate competencies; and that 68% had findings on consequence management.

Maluleke said little attention was paid to credible reporting on municipal performance, which is a key enabler of service delivery, transparency and accountability. She called on Dr Zamani Saul, premier, to influence the accountability ecosystem to improve how money was spent to improve service delivery.

In the AG report it was highlighted that the Joe Morolong Municipality had received a disclaimed audit with findings for eight consecutive years, and !Kheis for six consecutive years.

”Inadequate skills, lack of job descriptions”

When the Public Audit Act was amended in April 2019, it gave the AG the mandate to identify and report on material irregularities (MIs) and to take action if accounting officers do not deal with them appropriately.

An MI is any non-compliance with, or contravention of, legislation; fraud; theft; or a breach of a fiduciary duty identified during an audit performed under the Public Audit Act that resulted in or is likely to result in a material financial loss, the misuse or loss of a material public resource, or substantial harm to a public sector institution or the general public.

The positive impacts of a material irregularity process are that losses are prevented, investigations instituted and internal controls improved.

Maluleke’s office issued 27 MI notices to 25 municipalities. Of these, Emthanjeni, Joe Morolong, Kai! Gariep, Renosterberg and Sol Plaatje each received three MIs.

Regarding findings on infrastructure and maintenance, the AG used the Sol Plaatje Municipality as an example. Her officials found raw sewage flowing into the veld near the Legaeng Pump Station in a residential area, where animals were drinking the water.

She ascribed the general causes to inadequate skills and capacity to manage infrastructure projects; a lack of job descriptions, performance agreements and standard operating procedures for infrastructure units; a lack of accountability for non-performance by contractors and professional service providers; inadequate budgets for repair and maintenance; and delayed and ineffective procurement processes.

Countrywide she found that 9% of municipalities had not spent R3,4 billion in grants, while 3% spent money inadequately on repairs and maintenance. On the projects inspected, the AG found that in 61% of the cases there were project delays; costs overrun in 9% of cases; in 24% of the cases there was poor quality construction work; and 7% of the projects were not put into use after construction.