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Only 34 of South Africa’s 257 municipalities achieved clean audits for the 2023 financial year, and 20 of these were in the Western Cape. Mubesko Africa’s MD Nico de Kock puts this in context by explaining what a clean audit means.

A clean audit relates to three aspects.

  • The financial statements are free from material misstatements.
  • There are no material findings on the annual performance report.
  • There are no material findings of non-compliance with key legislation.

“Unfortunately, apart from the municipalities which performed well, the Attorney General found little improvement in the quality of financial reporting. The municipalities are relying on the audit process to identify areas needing correction whereas this should be an everyday function of the financial and administration executive and officials in local government.”

There is a direct correlation between a clean audit and service delivery as the Attorney General pointed to weaknesses in financial planning, including:

  • Loss of revenue caused by not billing or collecting revenue.
  • Poor payment practices, uncompetitive and uneconomical procurement practices.
  • Limited value and benefit received for money spent.
  • Weaknesses in project management.

“The Attorney General has identified three key areas to address the poor standard of financial management noting professionalising and capacitating local government, support from capable institutions and importantly, creating a culture of ethics and accountability.”

 

Nico de Kock
MD Mubesko Africa
nico@mubesko.co.za
mubesko.co.za

Mubesko Africa is a consulting practice offering financial accounting and management expertise, asset accounting and forensic services to the public and private sectors. Mubesko is a valued partner to several of South Africa’s top performing municipalities.