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Cape Gets Thumbs Up From A-G


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The Auditor-General gave the Western Cape municipalities a thumbs up for the financial year of 2007/2008. The Western Cape being the only province to have most of it's municipalities have all it's matters in hand and therefore not having anything outstanding, Cape Town Metropol was part of this group.

The lack of skills is one of the main reasons many of the other provinces municipalities were not up to scratch, including a few in the Western Cape. Accounting and other positions as well as mismanagement had some municipalities left in confusion while others deteriorated. In the article below Anel powell of iol news elaborates on the state of local government according to the Auditor-General. Use the link to view various articles on The City of Cape Town on CBN's website as well as business articles.

Cape Town gets clean bill of health from A-G
By Anell Powell

Western Cape municipalities showed a "notable improvement" in their financial results according to the 2007/08 audit, with the City of Cape Town getting a clean bill of financial health from the Auditor-General.

With KwaZulu-Natal, the Western Cape had the highest number of unqualified audit opinions in the country.

Cape Town, the only metro in the province, got an unqualified audit with no outstanding matters needing further investigation. Although the municipality had an unqualified audit in 2006/07, there were still some matters then that needed investigation.

The Auditor-General's audit on local government for the 2007/08 financial year reveals mixed results for the success of the Department of Local Government's Project Consolidate, started to alleviate the shortage of accounting skills in municipalities.

The Auditor-General audited 245 municipalities and 46 municipal entities.Of the 115 municipalities nationally that took part in Project Consolidate, 44 showed an improvement in the 2007/08 financial year, 60 remained unchanged and 11 deteriorated.

Auditor-General Terence Nombembe said that while there has been an improvement in audit outcomes, "much remains to be done" to improve the results of local government.

The Auditor-General gives a disclaimed audit opinion if financial statements are incomplete.

Disclaimer and adverse opinions, when the A-G disagrees with financial assertions, are the worst forms of audit opinions.

Unqualified opinions are given when there are no concerns about the financial information submitted.

While Cape Town performed well, one of its municipal entities received a qualified audit.

The A-G said the Philippi East Trading Centre received a qualified audit because of confusion about the centre's tax status and the submission of financial statements that did not comply with basic accounting principles. The centre has since filed for voluntary liquidation.

An investigation into the infrastructure delivery process in the City of Cape Town is expected to be done by December 2009, said Nombembe.

The province's five municipal districts; the Cape Winelands, Central Karoo, Eden, Overberg and West Coast, received financially unqualified opinions, with matters outstanding.

Nombembe said the Cape Winelands, Central Karoo and Overberg were the better performing districts as they had no municipalities with qualified or disclaimed audit reports.

Municipalities in the Eden and the West Coast districts had qualified audit opinions.

Improved municipalities included Bitou, Breede Valley, Knysna, Stellenbosch and the Overberg. Berg River and Saldanha Bay municipalities had deteriorated.

Oudtshoorn municipality, which had a disclaimed audit in 2006/07 financial year, could not be audited in the last financial year because its financial statements were not ready.

The suspension of key officials and a lack of financial skills also affected this municipality's financial performance.

Date Posted: 2009-07-16
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