Proper capacity building for senior managers in municipalities in the Eastern Cape is needed if the province hopes to achieve the goals of Operation Clean Audit in 2014.
During this week’s NCOP provincial week (17-20 April) it emerged that the capacity of senior managers is a serious problem, especially now that there is an amendment in the Systems Act where the officials must have the necessary qualifications and experience to be appointed to these section 57 and 56 positions and where these appointments are subject to the approval of the MEC.
The Auditor General, Singa Ngqwala, is clear in his stance that local municipalities do not manage their finances responsibly. The laws, rules and regulations are plain and officials and politicians know very well what is expected of them. Financial management is not only the responsibility of the chief financial officer.
The audit reports are poor and of the 45 municipalities not one had achieved a “clean” or financially unqualified audit without findings of concern in 2010/2011. Thirteen municipalities achieved an unqualified audit with findings, which is an improvement from only nine municipalities in the 2009/2010 financial year.
Thirteen municipalities got qualified opinions; two received an adverse opinion and seventeen a disclaimer of opinion. This means that 71% of municipalities had qualified financial statements. This is an improvement of 9% on the previous year. But in spite of this there are still municipalities that deteriorated or received disclaimers for more than two years running.
The Auditor General (AG) and his office is now going out of his way to ensure that mayors present their financial statements to council (every 6 months) and the AG, because if the mayor as the accounting officer does the presentation he will know what is going on in his municipality – it is his responsibility. The AG will visit each municipality on a door-to-door programme to ensure “… the right things are done correctly … and on time … according to all requirements”.
Most of the obstacles in achieving their clean audits are political infighting in some municipalities, the Grap 17 system, unbundling of assets and the costs involved, and the cost of the AG. Furthermore, funds owed by national and provincial departments cause severe cash flow problems with small municipalities.
Political leadership and administrative leadership will be required reach the benchmark standards. The AG will not change the prescribed standards. Councils and senior officials must serve the people first, not waste the ratepayers’ money and care about the service delivery in the local municipalities.