Salga welcomes improvements in audit outcomes

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Salga said in a statement, shortly after the release of the report by the Auditor General Kimi Makwetu on Wednesday, 30 July, that it had noted the improvements in audit outcomes of 2012/2013 as well as the increase in the number of auditees having received unqualified reports with no finding opinions.

The body noted the decrease in the number of auditees with adverse or disclaimers with findings opinions together with audits outstanding - 83 in 2012/13 as compared to 118 in 2008/09.

The report, which is based on the Municipal Financial Management Act, showed a slight improvement in the audit outcomes over the last five years. There were 63 improvements in different categories of audit outcomes and the regressions are starting to shrink with 25 categories.

As a comparison with the prior year, the number of auditees who received unqualified with no findings opinions improved by a net movement of 14 (30 as compared to 16) while the number of municipalities with adverse or disclaimer opinions, together with audits outstanding improved by a net movement of 16 (83 as compared to 99).

The Auditor General provides four types of audit opinions which are: unqualified with no findings; unqualified with findings; qualified with findings; and adverse or disclaimer with findings.

"We believe that the Auditor General's report is a key indicator of the state of local government and the information and insight presented in the report is aimed at empowering oversight structures as well as leaders in local government to focus on issues that will result in reliable financial statements, credible reporting on service delivery and compliance with laws and regulations," said Salga.

The body called on municipalities to address the root causes and risk areas identified in the report, including the quality of submitted financial statements; quality of performance reports; supply chain management; human resource management; information technology controls; and financial health.

Salga said it was committed to providing support to municipalities.

"Salga plans to support municipalities based on a multi-disciplinary approach focusing on four pillars: leadership, governance, institutional capacity and financial management.

"This noting that the audit outcomes are retrospective in nature and that the key areas of financial management and governance need monitoring on a continuous basis throughout the year."

Salga said plans were underway to implement an Executive Leadership and Coaching Programme (ELCP) which is targeted at municipal political and administrative leadership.

The purpose of the ELCP is to provide an experiential and coaching based learning platform for municipal leaders to formulate sound strategies and effectively respond in terms of their leadership and oversight responsibilities to achieve good governance in municipalities.

It has recently developed a comprehensive, multi-disciplinary, target-driven and customised Municipal Audit Support Programme (MASP) for municipalities who have routinely or intermittently received adverse or disclaimer audit opinions.

This MASP will be unveiled on Thursday, 31 July.