Audit outcomes of North West

local government

28 May 2013

The Auditor-General of South Africa 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.

Audit outcomes over the past three years

• All audits (including prior year backlogs) have been completed •

Minimal improvement over 2010-11

Unqualified with NO findings

Unqualified with NO findings

Unqualified WITH findingsUnqualified

WITH findingsAdverse/ Disclaimer

WITH findingsAdverse/ Disclaimer

WITH findingsQualified

WITH findingsQualified

WITH findings

Backlog auditsName of municipality Financial year Comment

Dr Ruth Segomotsi Mompati District Municipality

2009/10; 2010/11; 2011/12

Ditsobotla Local Municipality 2010/11; 2011/12

Kagisano Local Municipality 2009/10; 2010/11; 2011/12 In 2011/12 Kagisano and Molopo merged

Molopo Local Municipality 2009/10; 2010/11; 2011/12 In 2011/12 Kagisano and Molopo merged

Kgetlengrivier Local Municipality 2010/11; 2011/12

Lekwa-Teemane Local Municipality 2010/11; 2011/12

Mamusa Local Municipality 2008/09; 2009/10; 2010/11; 2011/12

Moretele Local Municipality 2009/10; 2010/11; 2011/12

Madibeng Local Municipality 2009/10; 2010/11; 2011/12

Unqualified with no findings

Unqualified with

findings

Qualified with

findings

Adverse/ disclaimer

Improved 2 2

Unchanged 3 1 17

Regressed 1 1

Total auditees reported on 0 5 4 18

Movements

2121

44

Movements of the 27 auditees reported on

22

Status of compliance with

laws and regulationsThere are material findings at of the auditees

Auditees with no compliance findings

Auditees with no compliance findings

Auditees with compliance findings

Auditees with compliance findings

100%100%

Quality of annual performance reports

There are material findings on the performance reports of of

the auditees

89%89%

Auditees with no PDO findings

Auditees with no PDO findings

Auditees with PDO findings

Auditees with PDO findings

What are the

areas that should

be focused on?

Supply chain Supply chain managementmanagement

Focus areas to improve audit outcomesQuality of Quality of

performance reportsperformance reportsHuman resource Human resource

managementmanagement

Quality of submitted Quality of submitted financial statementsfinancial statements

Information Information technology (IT) controlstechnology (IT) controls

Financial health Financial health (going concern)(going concern)

With no findingsWith no findings With findingsWith findings

Quality of submitted financial statements

Due to correction of material misstatements during the audit process, of

auditees were able to avoid qualifications.

UnqualifiedUnqualified QualifiedQualified

19%19%

What vital actions

should be taken?

Improving the drivers of key controls will improve

audit outcomes• Slight improvement in Governance

• Leadership and Financial and performance management remains largely unchanged

LeadershipLeadership

2011-12 2010-11

Financial and performance Financial and performance managementmanagement

2011-12 2010-11

GovernancGovernancee

2011-12 2010-11

GoodGood Causing concernCausing concern Intervention requiredIntervention required

XX%

… as will addressing the continuing

pervasive root causesKey positions vacant or key officials lacking appropriate competenciesA major challenge at 26 (96%) of the auditees.

Lack of consequences for poor performance and transgressionsA major challenge at 26 (96%) of the auditees.

Slow response by political leadership in addressing the root causes of poor audit outcomesA major challenge at 26 (96%) of the auditees.

Which key role

players should take

action?

Extensive assurance should be provided by

the key role players

Seni

or m

anag

emen

tSe

nior

man

agem

ent

First level of assuranceManagement/leadershipFirst level of assurance

Management/leadershipSecond level of assurance

Internal independent assurance and oversight

Second level of assuranceInternal independent

assurance and oversight

Third level of assuranceExternal independent

assurance and oversight

Third level of assuranceExternal independent

assurance and oversight

Exte

rnal

aud

itEx

tern

al a

udit

Provides assuranceProvides assurance Provides some assuranceProvides some assurance Provides limited/no assurance

Provides limited/no assurance Not establishedNot established

Mun

icip

al m

anag

erM

unic

ipal

man

ager

May

orM

ayor

Inte

rnal

aud

itIn

tern

al a

udit

Audi

t com

mitt

eeAu

dit c

omm

ittee

Trea

sury

, Loc

al

Gov

ernm

ent D

ept.,

SA

LGA,

Pre

mie

r’s

office

Trea

sury

, Loc

al

Gov

ernm

ent D

ept.,

SA

LGA,

Pre

mie

r’s

office

Mun

icip

al c

ounc

ilM

unic

ipal

cou

ncil

Mun

icip

al p

ublic

ac

coun

ts c

omm

ittee

Mun

icip

al p

ublic

ac

coun

ts c

omm

ittee

Legi

slat

ure

and

portf

olio

com

mitt

eeLe

gisl

atur

e an

d po

rtfol

io c

omm

ittee