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Number of AFS and audit reports collected and captured
A total of 187 annual financial statements and audit reports of
municipalities were collected, of which 67 signed documents could be
captured on the SALGA database. The 2008/09 audit opinions of four
provinces, Limpopo, Northern Cape, North West and Mpumalanga,
were analysed, together with each provincial Auditor General’s
key issues identified for improvement during the audit process.
A presentation was developed on practical tips for municipalities
to improve on issues of leadership, governance and financial
management and presented at the respective budget fora. In terms
of the assessment of the audit outcomes in Limpopo, Northern Cape,
North West and Mpumalanga and the presentation on practical tips to
improve audit outcomes, SALGA raised awareness on the importance
of preparing for the annual audit process and engagement with the
Office of the Auditor General. Through the SALGA presentation,
municipalities were made aware of the importance of the proactive
drafting of annual financial statements, proper record keeping and
clear and accurate responses to audit queries in order to minimise the
audit risk. Municipalities were guided as to the usefulness of having an
effective plan for the audit process and the need for early engagement
with the auditors on challenges experienced by the municipality, as
well as of the fact that management should be closely involved in the
audit process and be accountable for any queries. Municipalities also
understand that the success of Operation Clean Audit would not be to
only achieve a clean audit by 2014 but to ensure the sustainability of
clean audits thereafter. Although the activities in SALGA Western Cape
are still in the formative stages as regards Operation Clean Audit, terms
of reference have been developed and agreed to by the members of
the sub-committee and members attend the meetings of this forum,
making presentations and giving input where required. Further,
SALGA Western Cape facilitated a meeting between representatives of
the Municipal Manager’s Forum and representatives from the Western
Cape Office of the Accountant General. Where a number of issues
relating to the audit process and the cost of audits were discussed,
with those acknowledged by the Accountant General as shortcomings
currently being addressed.
SALGA Budget Week
Budget Week workshops were conducted in eight provinces,
namely Northern Cape between 22 - 23 November 2010, Western
Cape on 23 November 2010, Mpumalanga from 30 November –
01 December 2010, Free State on 02 February 2011, Limpopo from
21 – 22 February 2011, North West from 09 – 10 March 2011,
KwaZulu-Natal on 15 March 2011 and Gauteng during April 2011.
A step-by-step guide to developing a complete and correct property
and service database was developed and presented to all Budget Week
workshop, with the intention of assisting municipalities to maximise
own revenue, in comparison to identifying new sources of revenue or
collecting debt, and thereby demonstrating revenue effort. As part of
the initiative to improve audit outcomes SALGA, in partnership with
Ernest & Young, developed a presentation to share practical tips on
how to improve audit outcomes, a process which provided SALGA
with regular engagement with member municipalities and a platform
for municipalities to share information on the technical aspect on
municipal finance and compliance processes.
Evaluation of revenue and debtors management practices
The debtors management practices of municipalities were evaluated,
analysed and presented to the Budget Forum in 2010, profiling the
debtors of the six metropolitan municipalities. The credit control
policies of the City of Cape Town and Senqu Local Municipality were
analysed in order to create a framework towards the development of
credit control and debtors management guidelines to be undertaken
in the next financial year. The evaluation and analysis of the
debtors management practices and debtors profiles of a sample of
municipalities, including the six metros, provided insight into the
nature and extent of outstanding municipal debt and, as such, SALGA
contributed to policy development on revenue management in local
government. SALGA Gauteng convened a revenue enhancement
seminar on 12 November 2010 at the Parktonian Hotel and also
coordinated a workshop on supply chain management. During the
attendance of SALGA Northern Cape at the Department of Agriculture
Forestry and Fisheries (DAFF) meetings, the procedural manual was
presented to municipalities, with its primary objective being orientated
towards the staff of an income and expenditure department fulfilling
the responsibilities and duties inherent in their positions. For new
staff, the manual will serve as a helpful orientation to the tasks they
will need to perform and it will also be useful to councillors’ interns
who wish to familiarize themselves with the aspects of the operation of
departments of a local municipality.
Reports and position papers to Budget Forum
SALGA made submissions to the Budget Forum in October 2010 on key
areas. It presented position papers and made key recommendations
to the Budget Forum on the review of the local government fiscal
framework, the nature and the extent of outstanding municipal debtors
and progress towards an application for the introduction of a local
business tax. SALGA made inputs on the policy development around
fiscal arrangements for local government management of finances and
of particular importance was the request to the Budget Forum for an
independent commission to undertake a review of the local government
fiscal framework in order to improve the viability and sustainability of
municipalities. SALGA recommended that net debtors be used for
reporting outstanding municipal debt, that National Treasury should
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