Consolidated MFMA audit outcomes 2008 09 Municipalities and

Consolidated MFMA audit outcomes 2008 -09 Municipalities and municipal entities Ad Hoc Committee on Service Delivery, 12 May 2010 1

Consolidated - MFMA audit outcomes 2008 -09 Summary of audit opinions* * Cut off date – 08 March 2010 2

Consolidated - MFMA audit outcomes 2008 -09 Summary of audit opinions per province (municipalities and municipal entities)* * Cut off date – 08 March 2010 3

Consolidated - MFMA audit outcomes 2008 -09 Audit of Performance Information per province (municipalities and municipal entities combined) ■ Phased-in approach by the AGSA since 2005 -06, together with National Treasury ■ Stakeholder engagements to clarify approach and essence of Ao. PI have taken place and will continue throughout 2010 ■ 2010 will be a further opportunity to get ready for the Ao. PI opinion Areas requiring improvement 4

Consolidated - MFMA audit outcomes 2008 -09 Drivers to improve audit outcomes (Leadership) Key leadership issues requiring attention 1. Tone at the top towards financial management and accounting issues 2. Guidance, monitoring and supervision 3. Commitment to implement corrective actions 4. Maintaining required level of staffing numbers and skills 5

Consolidated - MFMA audit outcomes 2008 -09 Drivers to improve audit outcomes (Financial management) Key financial management issues requiring attention 1. Preparation of complete set of financial statements on a monthly basis 2. Basic internal controls implemented including reconciliations, document safeguarding, measures to prevent irregular, unauthorised, fruitless and wasteful expenditure 3. GRAP readiness particularly understanding of requirements as well as skills 4. Adequacy of information systems to produce financial statements 6

Consolidated - MFMA audit outcomes 2008 -09 Drivers to improve audit outcomes (Governance) Key governance issues requiring attention 1. Audit committee financial statement review, performance information review, risk assessment review 2. Internal audit scope of work and capacity 7

Consolidated - MFMA audit outcomes 2008 -09 Warning signals 8

Consolidated - MFMA audit outcomes 2008 -09 Commitments given by the AG during road shows - March and April 2010 AGSA revised initiative to proactively influence audit outcomes Key control identification, assessment and reporting at quarterly intervals Regular engagement with executive authority Independent monitoring of the impact of corrective actions 9

Consolidated - MFMA audit outcomes 2008 -09 Commitments given by provincial leadership during the AGSA road shows - March and April 2010 Overall summary of commitments given at 2008 -09 audit outcomes road shows The premiers and mayors committed to renew their endeavours to oversee the development and implementation of credible action plans with clear milestones to address all audit findings The provincial executive committed to monitoring the commitments by municipal leadership to achieving clean audit opinions Mayors will increase their oversight of their municipalities Political and administrative leadership will obtain an understanding of required accounting and reconciling activities and monitor whether these are being performed The Premiers committed to take into account the need for stability and continuity at municipalities when considering deployment of staff The provinces will act against municipal managers where disclaimers continue to occur The executive will make themselves available for periodic interactions with the AGSA to assess progress Launch of Local Government Turn Around Strategies 10