CoGTA optimistic Free State municipal audits will improve

Staff Reporter

Cooperative Governance and Traditional Affairs (CoGTA) MEC Thembeni Nxangisa says he is confident Free State municipalities will start registering improved audit outcomes because the provincial government has put in place a host of measures to assist them.

The MEC said this after Auditor-General (AG) Kimi Makwetu stated on Wednesday that municipal audit outcomes in the province had continued to regress for a third consecutive year.

The AG said almost half of the municipalities in the Free State had either not accounted for the manner in which they utilised their 2018-19 budgets or they had done it poorly.

In a written response to a raft of questions, Nxangisa told The Free Stater Thursday that although no municipality in the province has achieved a clean audit in the past three years, there have been marked improvements in some areas as the provincial CoGTA and treasury departments continue to work closely with the municipalities.

He said it was also important to note that some of the challenges are historical and may take long to address.

“It is important to pay attention not only to the final audit outcomes but to also have regard for the underlying root causes,” Nxangisa said.

“Even though the overall outcomes may not improve, it is important to also focus on improvement in the nature and number of audit paragraphs.

“CoGTA and Provincial Treasury have invested resources to turn around this position and in all likelihood we will see changes in the coming audit outcomes.”

The MEC admitted the audit outcomes painted a bleak picture on the state of municipal finances, but hastened to say the provincial treasury had identified financially distressed municipalities and worked with them to develop voluntary recovery plans which it continued to monitor.

On the issue of poor leadership and lack of accountability which have been blamed as key reasons for another set of dismal audit outcomes for Free State municipalities, Nxangisa said the province is now giving more support to municipal staff.

“One of the things highlighted by the AG’s report is the low level of assurance provided by the various leadership structures at the municipalities,” he said.

“The province has however supported municipal officials on attaining their minimum competency requirements.

“In addition the EXCO (Executive Council) has taken a decision that municipal officials must meet the requirements for their respective appointments.”

Asked why treasury has failed to hold anyone accountable over the past three years of poor results, Nxangisa said there are CoGTA disciplinary boards at municipalities that are expected to take requisite actions.

“In line with the Treasury’s MFMA (Municipal Finance Management Act) mandate of monitoring and supporting municipalities, the necessary reports are prepared and provided to the relevant governance structures such as the Provincial Public Accounts Committee which in turn is made up of all parties and has taken a strong stance to improve this position,” Nxangisa said.

Maluti-a-Phofung and Masilonyana local municipalities were listed in the AG’s report as having failed to submit financial statements for the second consecutive year, a situation the MEC said was as a result of a historic backlog which the two were trying to address.

“These municipalities had a historic backlog in terms of submitting financial statements,” he said.

“Necessitated by this and other legislative considerations, intervention was implemented at these municipalities.

“As a result there is a plan to assist these municipalities to catch up with the submission annual financial statements.”

On how the local authorities could build confidence and trust among the people given that some municipalities have failed to deliver services due to misuse of funds, Nxangisa said they will continue working with other statutory bodies and seek guidance on how to address the challenges.

“We certainly owe it to Chapter 9 institutions such as the AGSA to highlight gaps in terms of reliability and quality of reporting by the different government institutions and entities,” he said.

“Ours is to take up these issues and ensure that comprehensive and responsive audit action plans are developed and implemented by the municipalities.”