GEORGE NEWS - For the second consecutive financial year, George Municipality has received an unqualified audit opinion. 

This time round they missed a full clean audit by a mere inch, having only one matter raised by the Auditor General (AG). The matter in question refers to the accuracy of the indigent database, said municipal communications officer Athane Scholtz. 

It relates to two residents who were still registered on the indigent database (out of 13 800 on the database) - one of whom is deceased and the other had moved back to the Eastern Cape. This came to light in a statement by the DA Constituency Head of George, Geordin Hill-Lewis. 

"While it is a disappointment to have missed [a full clean audit] because of such a small matter, it is also encouraging for the future. We are now confident that George can attain a clean audit in the future, something which seemed impossible just two years ago. The DA in George congratulates Mayor Leon van Wyk and the entire DA caucus for their commitment to achieving this turnaround, and their role in it," said Hill-Lewis.

Challenges and campaigns
Scholtz said George Municipality runs annual awareness campaigns around the registration of Indigents on the database as well as auditing of the older applications. 

"The implementation of the standard annual actions for 2020 was however hindered by challenges arising from the Covid-19 pandemic," she said.

The Financial Services Directorate ran an awareness campaign in February this year around indigent registration, advocating the importance of updating information with the department. 

"The directorate will continue to put internal control measures in place to ensure that the database is accurate."

An unqualified opinion is defined as an auditor's opinion that the financials are fairly presented, containing no material misstatements. Scholtz said George Municipality's financial performance and cash flows for the previous financial year ended in accordance with the South African Standards of Generally Recognised Accounting Practice (SA Standards of Grap), the requirements of the Municipal Finance Management Act 56 of 2003 (MFMA) and the Division of Revenue Act 16 of 2019 (Dora).

Find some definitions of auditing terms below.

Definitions:

1. AFS: Audited Financial Statements

2. Qualified Opinion: The financial statements contain material misstatements in specific amounts, or there is insufficient evidence for the auditors to conclude that specific amounts included in the financial statements are not materially misstated.

3. Unqualified Opinion: The financial statements contain no material misstatements. Unless the Auditor-General expresses a "clean audit outcome", findings have been raised on either reporting on predetermined objectives or non-compliance with legislation, or both these aspects.

4. Clean Audit: The financial statements are free from material misstatements (in other words, a financially unqualified audit opinion) and there are no material findings on reporting on performance objectives or non-compliance with legislation.

Garden Route District Municipality

Garden Route District Municipality (GRDM) obtained its third consecutive unqualified audit outcome for the 2019/20 financial year, with one finding only.

Mayor Memory Booysen welcomed the audit outcome: "We invested a lot of time and energy in assuring that we comply with all relevant legislative prescripts in the local government environment and that we apply the relevant standards when preparing our financial statements." Municipal Manager Monde Stratu said there were no financial material misstatements, no performance management misstatements and no material inconsistencies reported in their annual report.

The only material finding identified by the Auditor General relates to the composition of the Bid Adjudication Committee, which was the same finding raised in the previous audit. 

Although the finding was corrected in November 2019, it was raised again, said Head of Communications Herman Pieters. "The AG regarded this as a transversal matter and dealt with it as such. It was subsequently revealed by the AG that the GRDM is in a sound financial position."

He said the final step for the GRDM was for its Municipal Public Accounts Committee (MPAC) to compile an oversight report, which was considered during a Special Council meeting on Tuesday 30 March.

MPAC Chairperson Cllr Clodia Lichaba congratulated the GRDM administration for maintaining an unqualified audit outcome, given the pandemic challenges. 

"Many audit-related engagements took place during a critical time when the the institution only had skeleton staff to assist," said Lichaba. She said there was a vast improvement on the content of the Audit Report because of a drastic reduction in material matters.

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