Contents
• Introduction
• Leadership
• What did we do?
– Action Plan
– Strengthen Oversight
• Conclusion
Introduction
• A Clean Audit has major advantages for
any municipality because:
– It instills confidence to the Ratepayers which
results in improved revenue collection
– Instills confidence in would be investors
– Promotes the culture of good governance
– Ensures sound financial management
Western Cape Lead
Financial Years
National Clean Audits
W/C Clean Audits
2009/2010
7
1
2010/2011
13
2
2011/2012
9
5
Leadership
• To obtain a Clean Audit requires good
leadership
• Leadership means:
–
–
–
–
–
The Mayor
Municipal Manager
Chief Financial Officer
All Councillors
Senior Managers
• It is everybody’s business
What did we do- The Action Plan
• We have taken the Management Letter
and created an Action Plan
– All comafs were listed in the action plan
– All the issues raised by the IA were also listed in
the Action Plan
• Regular meetings were held with all
affected officials to report on what they
doing to rectify or avoid recurrence
• Quarterly feedback is submitted to AG and
Province
No Audit Finding
3.
EX.22 (COMAF 18)
No
agreements
in place
Detailed Finding
AG recommendation
Management response
Progress to date
Contractual agreements for
land sales in respect of
long term debtors between
the municipality and home
owners of scheme 135,
Bonnievale, could not be
provided. During the
process of amalgamation
the documentation was to
be transferred from
Bonnievale to Ashton but
had been misplaced and
cannot be found.
It is recommended that
management regularly
review and confirm the
review all control
reconciliations in order
to ensure that
information available for
reporting is complete
and accurate.
This agreements as kept by
the former Bonnievale
Municipality, was transferred
to Ashton with the
amalgamation process nearly
10 years ago as indicated.
Steps will be taken to try to
find the agreements.
Copies of the contracts
were found.
Responsible
person
Mr J de K
Jooste
Ms J Louw
No Audit Finding
4.
EX.15 (COMAF 13)
Useful lives
incorrect
Detailed Finding
AG recommendation
Management response
In terms of paragraph 92 of
Generally Recognized
Accounting Practice
(GRAP) 102 – Intangible
assets, the useful life of an
intangible asset that arises
from binding arrangements
(including rights from
contracts) shall not exceed
the period of the binding
arrangement, but may be
shorter depending on the
period over which the entity
expects to use the asset. If
the binding arrangements
(including rights from
contracts) are conveyed for
a limited term that can be
renewed, the useful life of
the intangible asset shall
include the renewal
period(s) only if there is
evidence to support
renewal by the entity
without significant cost.
Management should
assess the useful lives
of intangibles assets
based on the period the
intangible asset will be
in use.
Management agrees with
the audit finding as it
relates to the internal
control deficiency.
Management will
implement the
recommendation and
assess the useful lives of
intangible assets from 01
July 2012 based on the
period the intangible asset
will be in use.
Progress to date
As from 1 July 2013 all
intangible assets useful
lives are changed to be
the same as the licence
agreements.
Responsible
person
Mr. CF
Hoffmann
Mr. B Brown
What did we do?- Bid Evaluation
Committee
• Regulation 44 of SCM is the key issue for
most municipalities
• Proper evaluation of tenders
• Established a permanent Bid Evaluation
Committee (BEC)
– Ensure consistent application of requirements
– Proper training of BEC Members
What did we do? Strengthen
Oversight
• Competent Audit Committee
• IA Unit must be functionally competent
– Implement a proper Audit Plan
• Compliance Officer
– Follow a compliance programme
– Advise MM on compliance matters
– Compile and Administer a Risk Management
Programme
What did we do? Preparation plan for
the AG
• Every year in May the BTO prepares a
Plan for the end of the year and
compilation of AFS
– Timelines for requisitions and receipt of invoices
– Information required for the Audit File
– Responsible persons are identified to provide the
required information
• Audit Committee must review the AFS
• Draft AFS are given to AG to comment of
the record
Conclusion
• The myth that clean audit does not
contribute to service delivery is incorrect
because:
– Compliance with Laws and Regulations
– Sound Financial Management
– Predetermined Objectives which is service
delivery
DIE EINDE
Dankie
Enkosi
Thank You