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Number of municipalities with clean audits increase

The number of municipalities that have received clean audits has risen from 54 to 72 in the 2014/2015 financial year.

In the Free State, the Thabo Mofutsanyane district municipality has become the first municipality in the province to receive a clean audit.

Auditor-General Kimi Makwetu has been presenting his 2014/ 2015 Local Government Outcomes audit report in Pretoria.

“Thabo Mofutsanyane district has in fact become the first clean audit in that province of the Free State. So we would like to congratulate them for having done this as well as sticking to their commitment to deliver the good outcomes when we visited them last year.”

Makwetu says, “I think it is also worth noting that in the Free State the Matjhabeng local Municipality has also been identified and concurred by the leadership of the province that it is one of the troubled spots when it comes to the  disciplines of financial management and other matters of governance.”

Makwetu says that 92% of municipalities financial health is concerning.

The number has increased by 10% from the year before. Makwetu says municipalities are spending more resources that they have available.

Some highlights of the Local Government Outcomes include:
• Number of clean audits have increased from 13 to 54 between 2010/ 2011 – 2014/ 2015;
• 18 additional municipal entities also achieved clean audit status, taking the total number of clean audits to 72 in the current period;
• Provinces with the highest proportion of municipalities with clean audit opinions in 2014-15 were the Western Cape (73%), Gauteng (33%) and KwaZulu-Natal (30%);
• Irregular expenditure has more than doubled since 2010-11 to R14,75 billion and is incurred by an increasing number of municipalities;
• Fruitless and wasteful expenditure in 2014-15 was more than R1 billion higher than in 2010-11 at R1,34 billion and was again incurred by an increasing number of municipalities. Municipalities in the provinces of Mpumalanga, Eastern Cape, North West, Free State and Northern Cape were the main contributors to this increase;
• Unauthorised expenditure has also increased threefold since 2010-11 to R15,32 billion.
• Consultancy costs for financial reporting services continued to increase over the past five years to R892 million in 2014-15;

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