MFMA 2013-14
Audit outcomes of local government
2014-15
MFMA
Reputation promise
The Auditor-General of South Africa
(AGSA) has a constitutional mandate and,
as the Supreme Audit Institution (SAI) of
South Africa, it exists to strengthen our
country’s democracy by enabling oversight,
accountability and governance in the public
sector through auditing, thereby building
public confidence.
2
Improvement in overall audit outcomes
30% (8)
30% (8)
22% (6)
45% (12)
15% (4)
15% (4)
2013-14
MFMA
Unqualified with
no findings
Unqualified with
findings
22% (6)
Qualified with
findings
Adverse
18% (5)
7% (2)
4% (1)
52% (14)
56% (15)
59% (16)
2011-12
2010-11
2009-10
27
auditees
27
auditees
27
auditees
Disclaimer
37% (10)
22% (6)
33% (9)
2013-14
27
auditees
33% (9)
2012-13
27
auditees
3
Movement in audit outcomes
6
Improved
Unqualified with
findings = 12
Qualified with
findings
=6
Dsclaimer with
findings
=9
•
•
•
•
•
•
Mangaung Metro
Metsimaholo
Setsoto
Tokologo
Centlec
Naledi
2
19
Unchanged
•
•
•
•
•
•
•
Lejweleputswa DM
Thabo Mofutsanyana DM
Dihlabeng
Nketoana
Tswelopele
Maluti-a-Phofung Water
Lejweleputswa
Development Agency
•
•
•
•
Xhariep DM
Kopanong
Masilonyana
Mohokare
•
•
•
•
•
•
•
•
Mafube
Maluti-a-Phofung
Mantsopa
Matjhabeng
Moqhaka
Nala
Ngwathe
Phumelela
2013-14
MFMA
Regressed
Colour indicates audit opinion
from which auditee has
moved from.
•
Fezile Dabi DM
•
Letsemeng
4
Quality of submitted financial statements
2013-14
MFMA
2013-14
Outcome if
NOT corrected
4%
(1)
96%
(26)
Outcome
after corrections
56%
(15)
Financially unqualified
(clean audit/
unqualified with
findings)
11 auditees
Financially qualified
(qualified with
findings)
44%
(12)
Avoided qualifications
by correcting material
misstatements
during audit process
2012-13
Outcome if
NOT corrected
100%
(27)
Outcome
after corrections
70%
(19)
8 auditees
30%
(8)
5
Quality of submitted annual performance
reports
Outcome if
NOT corrected
2013-14
12%
(3)
88%
(23)
2012-13
85%
(22)
15%
(4)
Outcome if
NOT corrected
8%
(2)
92%
(24)
Outcome
after corrections
With no material
adjustments
1 auditee
Avoided findings by
correcting material
misstatements
during audit process
Outcome
after corrections
85%
(22)
15%
(4)
2013-14
MFMA
2 auditees
With material
adjustments
Auditees with no material
misstatements:
• Xhariep DM
• Kopanong LM
• Nketoana LM
Auditees made
corrections to avoid
findings:
• Current year: Thabo
Mofutsanyana DM
• Prior year: Thabo
Mofutsanyana DM and
Kopanong
The denominator in both
years is 26 as Phumelela
LM and Mafube LM did
not submit performance
reports for the 2013-14
and 2012-13 years
respectively.
6
Findings on compliance with key legislation
Significant non-compliance with legislation by 100%
88
of auditees
2013-14
MFMA
With findings
100% (27)
100% (27)
100% (27)
100% (27)
100% (27)
2013-14
2012-13
2011-12
2010-11
2009-10
27 auditees
27 auditees
27 auditees
27 auditees
27 auditees
77
Drivers of internal control
2013-14
MFMA
Financial and performance
management
Leadership
Governance
Good
Concerning
4%
4%
7%
11%
4%
Intervention
required
Improved
52%
44%
2013-14
41%
52%
52%
2012-13
41%
52%
41%
48%
44%
48%
2013-14
2012-13
2013-14
Stagnation or
little progress
55%
2012-13
8
Assurance provided by key role players improved
2013-14
MFMA
Legislature/NCOP and
portfolio committee on
local government
Municipal Public accounts
committee
Third level of assurance
External independent
assurance and oversight
Municipal councils
Coordinating/
monitoring
institutions
Audit committee
Internal audit
Executive authority
Accounting officer/
authority
Senior management
First level of assurance
Management/Leadership
Second level of
assurance
Internal independent
assurance and oversight
Provides assurance
Provides some
assurance
Provides limited/no
assurance
Improved assurance
4%
40%
4%
48%
7%
45%
Limited
progress on
assurance
11%
44%
33%
30%
44%
37%
Regressed
100%
56%
48%
48%
56%
59%
67%
56%
63%
9
Root causes should be addressed (top three)
2013-14
MFMA
Slow response by management in addressing the root causes of poor
audit outcomes(accounting officer and senior management)
89%
2013-14
56%
2012-13
Improved
Key officials and support staff lack appropriate competencies
Stagnant or little
progress
78%
74%
Regressed
Lack of consequence for poor performance
74%
100%
10
1
1