ACCORDING to an article in the magazine Accountancy SA this month, only 2% of municipal authorities and 4% of provincial departments receive unqualified (clean) auditors’ reports, something which used to be considered a shame.
Says the author of the article, Prof Dave Lubbe of the University of the Free State: “These statistics are shocking, to put it very mildly, and an indication of the chaotic state of financial reporting in the public sector.
“The first reason for this troubling situation is probably that many politicians have little if any respect for legislation that regulates financial matters in the public sector.
“Getting an unqualified auditors’ report demands a team effort from politicians, officials, the audit committee, and so forth.
“One of the problem areas is that many members of the ruling party seem to be above ‘good governance’. These members have no wish to address or even to bring to light the poor service delivery, fraud and corruption, nepotism etc. of which many fellow party members make themselves guilty.
“People who are appointed as “directors” often do not have sufficient training and experience to do justice to the auditing of a large local authority with its complicated accounting and computer systems.
“Very often, these incompetent people are actually appointed because they do not have the ability to carry out a proper audit to bring to light weaknesses and fraud, and in a manner of speaking, to ‘rock the boat’.”
Now, according to the Municipal Manager, the problems in the Drakenstein Municipality audit pointed out by the Auditor General are to be deemed weaknesses, not irregularities (“Wrong choice of words”, Paarl Post letters page 25 April).
I don’t agree. In auditing terms, this only holds water if the weaknesses pointed out, have not occurred before.
Why is it that this is the second year in a row that the Auditor General has pointed out weaknesses in the performance management system at Drakenstein?
Then surely it must now be considered an irregularity - and I’m sure that it is not the only problem which has surfaced for the second year running.
Perhaps the Paarl Post’s choice of words was not so far off the mark.
Auditor,
Paarl
