Gauteng MEC for Finance Barbara Creecy on Thursday welcomed the significant improvement of the audit outcomes of municipalities in South Africa’s most populous province.

The Auditor-General’s 2013 financial year audit outcomes released on Wednesday showed that, of the 37 municipalities and municipal entities audited, three had achieved clean audits, 32 achieved unqualified audits and only two received qualified audits, a decline from the six last year.

There were no regressions among Gauteng’s three metropolitan municipalities, two district municipalities, seven local municipalities and 25 municipal entities.

Auditor-General Kimi Makwetu pointed out that Gauteng’s municipalities, which had an overall total expenditure of R83.8-billion during the year under review, had achieved a reduction in irregular and unauthorised expenditure, as well as fruitless and wasteful expenditure.

The three Gauteng metros, namely Johannesburg, Ekurhuleni and Tshwane, accounted for 88% of the total expenditure, which comprised R20-billion for payroll costs, R52.2-billion for goods and services, and R11.6-billion in capital expenditure.

Gauteng municipalities collectively cut more than R1-billion of irregular expenditure during the year, from R1.8-billion in 2012 to R466-million in 2013, which had been incurred on the back of noncompliance with supply chain management legislation and other applicable regulations.

Makwetu pointed out that this included awards made to suppliers in which officials of other State institutions, employees of the entities or councillors had an interest, which was a nationwide challenge.

While in most cases goods and services were delivered, it was impossible to confirm whether value for money was received.

Meanwhile, the audit found that four Gauteng entities had improved during the 2013 financial year, while 33 maintained the same audit outcomes as the year before.

The Johannesburg Social Housing Company and Johannesburg Fresh Produce Market maintained their financially unqualified audit opinion with no material findings, while the Sedibeng district municipality shifted upwards to a clean audit.

The Johannesburg metropolitan municipality improved from a qualified to unqualified audit for the first time since the new billing system was introduced during the 2009/10 financial year, while the Ekurhuleni and Tshwane metros remained unqualified with findings, Creecy pointed out.

However, she raised concern over the qualified audits in Randfontein and Westonaria and the impact that weaknesses in financial management had on service delivery in these areas.

While the municipalities and entities were not in a financial crisis, some units were experiencing financial difficulties that necessitated a “viable intervention strategy” to stabilise liquidity concerns and prevent the municipalities from moving into “the red zone”, the Auditor-General’s audit report had emphasised.

“We all know that building solid institutions and enhancing transparency through robust accounting practices is the only long-term guarantee against the scourge of corruption,” Creecy commented.

The Gauteng Provincial Treasury and the Department of Cooperative Government and Traditional Affairs (Cogta) would collaborate to strengthen financial management and leadership, accounting practices and revenue collection in the embattled municipalities.

“Together with Cogta, we will also work harder to support all district and local municipalities to improve revenue collection, supply chain management and internal audit functions so that in future years we can look forward to even better [audit] outcomes in Gauteng,” Creecy said.

Meanwhile, in Limpopo, municipal performance had deteriorated, with nine municipalities receiving adverse or disclaimer with findings audits, seven outstanding audits and 15 qualified with findings. Only one entity had achieved an unqualified with findings audit, with no clean audits recorded.

Mpumalanga had also reported a deterioration with 11 municipalities qualified with findings and registering adverse or disclaimer audits. Two of the audited entities received clean audits, with three found unqualified with findings.

KwaZulu-Natal, the Free State, the Eastern Cape and the Western Cape had all reported improvements in their audits during the 2013 financial year.

The Auditor-General revealed 11 clean audits in KwaZulu-Natal, with another 46 unqualified with findings. Twelve municipal entities had been tagged qualified with findings and three had adverse or disclaimer audits.

While no clean audits were reported in the Free State, there were eight unqualified with findings, nine qualified with findings, eight adverse or disclaimer audits and two outstanding audits in the province.

The Eastern Cape showed improvement during the year under review with one clean audit and 18 unqualified with findings. Twenty-one municipalities received qualified with findings audits, where there were 13 adverse or disclaimer audits and two outstanding audits.

While the Western Cape reported one adverse or disclaimer audit and one outstanding audit, 12 of the province’s municipalities had received clean audits and 18 were found unqualified with findings.

The North West and Northern Cape remained unchanged. The North West reported six unqualified with findings audits and six municipalities qualified with findings. Fifteen municipalities received adverse or disclaimer audits.

The Northern Cape received one clean audit, six unqualified with findings, eight qualified with findings, 13 adverse or disclaimer and four outstanding audits.