PRESENTATION ON
OPERATION CLEAN AUDIT 2014
SALGA FINANCE WEEK
07-08 FEBRUARY 2013
PRESENTATION FOCAL AREAS
•
•
•
•
AUDIT OUTCOME
STATUS ON FINANCIAL OVERSIGHT
MIG EXPENDITURE
FORWARD PLANNING
Audit outcomes summary
Audit opinion
Improvement
Unchanged
.
Financially unqualified
with no findings
Regressed
1
Financially unqualified
with findings
1
Qualified
6
2
2
Disclaimer/ Adverse
Total
5
2
13
7
9
Comparative Overview of the audit
outcomes
Audit
Opinion
Disclaimer
Adverse
Qualified
Unqualified
Clean Audt
Outstandin
g
Total
2011/12
2010/11
10
0
15
1
1
3
10
3
12
3
2
0
2009/10 2008/
09
9
19
0
0
11
9
9
8
1
0
0
0
30
30
30
30
2011/12 Key Common Audit
Findings
• Non-compliance with Supply Chain Management
• An increase in unauthorised, fruitless and
wasteful expenditure
• Assets Management- assets registers not
compliant with GRAP
• Lack of supporting documents
• Completeness of revenue
• Ineffectiveness of governance structures
• Lack of application skills and knowledge of
financial systems
2011/12 Annual Financial Statements/
Annual Performance Reports
• 28 Municipalities submitted on time
-
Molemole – resubmitted on 31 October 2012
Sekhukhune- 31 November 2012
BelaBela- Outstanding
All 30 municipalities submitted their annual performance
reports to the AG by the 31 August 2012.
• 24 municipalities have submitted audit remedial plans to the
Department, the due date was on the 21 December 2012.
• Audit remedial plan must be developed in relation to final
management letter.
• Monitor the implementation of audit remedial plans and
ensure supporting documents on issues resolved.
6
2013/14 MPRA Implementation
• Implementation of MPRA-compilation of valuation roll
• Application for extension of the validity period of valuation roll
must be submitted on time to the Department.
• Gazetting of property rates by-law
• New valuation roll compilation – General complies of MPRA
especial with regard to inviting property owners to inspect and
lodge objections on valuation roll.
• Appointment of Professional Valuers- appointed Valuers must
be registered.
• Utilisation of Valuation Appeal Board
7
Brief update on residents
accountants
The Department is currently assisting
municipalities under “Resident Accountant”
project.
• CorpMD and Ngubane/Kgorong
Consultants are appointed and started June
2012.
• SAB&T and PWC started in
November/December 2012, however, there
were challenges with regard to resources.
• Advertised for additional Service Providers
– briefing session held.
Project Implementation
The Project is monitored through the following
structures
• MEC/Mayors forum, co-chaired by MEC for
Coghsta and Provincial Treasury. This
includes the Executive Mayors/Mayors,
Municipal Managers, Office of the Auditor
General and SALGA .
• Monthly reports of Resident Accountants are
signed by Municipal Managers and Chief
Financial Officers.
Challenges with regard to Project
• Delayed from the service providers- unavailability
qualified resource
• High vacancy rate in Budget and Treasury Units in
Municipalities.
• Lack of ownership of the project by Municipalities
• Lack and unavailability of supporting documents.
• Lack of proper internal controls such as adhering to
management policies and treasury regulations, safe
guarding of assets,
• Lack of implementation of audit remedial plans
• Lack of skills in respect of municipal accounting
procedures and standards.
Oversight Structures
INTERNAL AUDITOR, PERFORMANCE AUDIT
COMMITTEE AND RISK MANAGEMENT
•
All municipalities have established Internal Audit Unit and appointed Audit
Committees.
•
Prioritise the appointment of Risk Officers.
•
Establishment of functional risk management committees
•
Additional appoint of internal auditors to assist with performance
management audit and IT audit
•
Audit Committees must report to council on quarterly basis, AG has raise
this non-compliance for many municipalities.
•
Performance Audit Committee must be appointed although Audit
Committees are utilised to perform this function.
•
Implementation of internal audit and audit committee recommendations.
12
MUNICIPAL PUBLIC ACCOUNTS
COMMITTEE (MPAC)
• Provincial MPAC Forum has been established and
the Provincial Executive MPAC committees is
elected.
• Conducted district-based training sessions incollaboration with Provincial Treasury, Provincial
Treasury, Provincial Legislature and SALGA.
• Internal Auditors should not serve as the
coordinator or secretariat of the Committee.
• Communications between MPAC and Accounting
Officers must be in writing.
13
MIG EXPENDITURE
Expenditure per district as at end of December 2012
District
Allocation
(R)
Expenditure
(R)
% Exp.
Sekhukhune
578,623,000
175,371,988
30.3
Mopani
503,277,000
92,386,273
18.4
Vhembe
532,740,000
246,138,284
46.2
Capricorn
548,509,000
182,772,197
33.3
Waterberg
299,734,000
93,518,346
31.2
2,462,883,000
790,187,087
32.1
Province
15
Provincial Overview: 2012/13 MIG Expenditure
The Provincial expenditure is R923.513m (32.08%)
Of concern regarding the expenditure in the 2012/2013 financial year:
•
Late registration of projects to be implemented in the current financial
year. We still have municipalities registering projects.
•
Having projects earmarked for implementation in the current financial
year being advertised for procurement of consultant to do designs,
•
projects where tenders have closed and validity period expired,
requiring re-advertising.
•
Expenditures for municipalities with approved roll over very low,
16
Expenditure per municipality as at end of December 2012
SEKHUKHUNE DISTRICT
Municipality
Allocation
(R)
Expenditure
(R)
% Exp.
Ephraim Mogale
21,678,000
6,895,617
32
Elias Motsoaledi
35,223,000
25,206,926
72
Makhuduthamaga
41,436,000
4,818,640
12
Fetakgomo
18,690,000
8,869,693
47
Greater Tubatse
44,048,000
9,957,916
23
417,548,000
119,623,195
29
Sekhukhune
17
Expenditure per municipality as at end of December 2012
MOPANI DISTRICT
Municipality
Allocation
(R)
Expenditure
(R)
% Exp.
Greater Giyani
36,331,000
1,173,753
3.2
Greater Letaba
40,027,000
13,978,085
35
Greater Tzaneen
56,665,000
13,930,960
25
Ba-Phalaborwa
20,778,000
8,151,324
39
Maruleng
30,174,000
10,097,281
34
319,302,000
45,054,869
14
Mopani
18
Expenditure per municipality as at end of December 2012
VHEMBE DISTRICT
Municipality
Allocation
(R)
Expenditure
(R)
% Exp.
Musina
14,604,000
888,869
6
Mutale
16,977,000
9,361,144
55
Thulamela
74,355,000
43,439,265
58
Makhado
67,400,000
13,143,886
20
Vhembe
359,404,000
179,305,120
50
19
Expenditure per municipality as at end of December 2012
CAPRICORN DISTRICT
Municipality
Allocation
(R)
Expenditure
(R)
% Exp.
Blouberg
30,904,000
2,002,382
6
Aganang
26,371,000
13,473,053
51
Molemole
23,916,000
19,377,730
81
Polokwane
221,514,000
95,036,811
43
34,836,000
22,845,745
66
210,968,000
30,036,477
14
LepelleNkumpi
Capricorn
20
Expenditure per municipality as at end of December 2012
WATERBERG DISTRICT
Municipality
Allocation
(R)
Expenditure
(R)
% Exp.
Thabazimbi
42,153,000
26,869,172
64
Lephalale
43,557,000
11,925,259
27
Mookgophong
16,420,000
8,426,779
51
Modimolle
41,437,000
8,645,944
21
Bela-Bela
18,824,000
11,298,006
60
137,346,000
26,353,186
19
Mogalakwena
21
2012/13 MIG exp. per municipality as at end of December 2012
• Expenditure in municipalities with high under spending in
2011/2012 financial year is very low; Sekhukhune (28.65%),
Mopani (14.11)%, Capricorn (14.24%) and Mogalakwena
(19.19%).
– Further note : Capricorn and Mogalakwena have their 2011/2012
roll over applications approved.
• COGHSTA engaged with DWA to expedite approval of
technical reports. Currently the meetings for such
approvals are being held every week on Tuesdays.
22
Forward Planning
23
FORWARD PLANNING
• OBJECTIVES OF FORWARD PLANNING:
– To ensure that allocated MIG is spend to alleviate
backlogs and improve access to service delivery.
– Planning is conducted in the preceding year for
implementation to commence earnestly in the
beginning of the approaching year.
– To ensure that prescripts of the Division of
Revenue Act (DoRA) are adhered to.
24
FORWARD PLANNING CONT….
• PRESCRIPTS OF DORA REQUIREMENTS: MUNICIPALITIES
MUST:
– Submit technical reports to respective sector department on
sanitation, water, roads and storm water, sports and
recreation projects by 31 May.
– Submit registration forms of all planned projects for the
approaching year for approval to COGHSTA by 01 August.
– Submit detailed project implementation plans to the National
department (through COGHSTA), including project designs,
procurement process, and EIA approvals timelines by 31
October.
25
FORWARD PLANNING CONT….
• IMPLEMENTATION OF CAPITAL PROJECTS:
– Based on the DoRA prescripts, municipalities are
ready to commence with Supply Chain
Management process by November.
– Appointment of Service Providers can be effected
by March.
– Contractors can take site between April and June
and payments for work completed can commence
in July.
26
COMMENTS
• BENEFITS OF FORWARD PLANNING
INCLUDE:
– Expenditure of more than 95% of MIG
allocations.
– Improved access to basic services by
Limpopo people and/or alleviation of
backlogs.
27
Conclusion
• Operation clean audit can be attained only if
Council plays its role in terms of oversight.
• Strengthen support needed by the residents
accountants when performing their functions.
• Institutionalize PMS and ensure that all
section 56 managers prioritise clean audit as
part of their performance plan.
• Deal with under/unacceptable performance.
28
THANK YOU
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