GEORGE NEWS - George has achieved a 6th consecutive clean audit for the 2016/17 financial year. Chief Financial Officer Keith Jordaan welcomes the Auditor-General's report released last Tuesday, 22 May, and says this demonstrates that George is continuing with its good governance practices. "We are managing these financial resources in a sustainable manner, allowing for the development of a capable city that delivers for its people," he said.
In the latest report by National Treasury on the state of local government, titled The State of Local Government and Financial Management 2017, only 33 municipalities across the country received a good assessment by the Auditor-General (AG), of which 21 are based in the Western Cape. This is the second year that the Western Cape is the most financially stable province. (Read the full report at www.georgeherald.com.)
Mossel Bay and Swartland municipalities were awarded "best-run" status. Oudtshoorn received a qualified audit, whereas Bitou, Knysna, George and Mossel Bay were granted unqualified audits "without findings".
The report shows that a total of 128 municipalities are in financial distress. In the previous financial year, irregular expenditure by municipalities increased by over 50% to R16-billion. This year however, it increased by 75% to R28,4-billion. The conclusion of the assessment is that municipalities in financial distress are characterised by poor cash flow management and an increase in outstanding debtors and creditors.
Western Cape DA leader Bonginkosi Madikizela said local governments are working hard to develop local economic strategies to provide people with much needed jobs. "The budgets are drafted with the interest of the residents at heart, ensuring that service delivery and infrastructure receives top priority.
"We've adopted a zero tolerance approach to corruption and maladministration, which is killing so many other municipalities across the country. In the Western Cape we are working hard [to the benefit of] the people," said Madikizela.
The term "unqualified audit" is the correct terminology for a clean audit.
Unqualified and qualified audits
Jordaan previously said an unqualified opinion is an independent auditor's judgement that a municipality's financial records and statements are fairly and appropriately presented, and in accordance with Generally Recognised Accounting Principles (Grap). An unqualified opinion is the most common type of auditor's report.
An unqualified opinion is issued when the independent auditor believes that the municipality's financial statements are sound; that is, the statements are free from material misstatements. This is different from a qualified opinion, which is issued when the independent auditor discovers something in the financial statements that is subject to major concern.
A qualified opinion is a statement issued after an audit has been done by a professional auditor that suggests the information provided was limited in scope and/or the company being audited has not maintained Grap accounting principles.
Read the Local Government Finances report below:
State of LG Finances Report 2016-17
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