WITH the 2014 Operation Clean Audit deadline looming, Bhisho has turned to the private sector to help troubled Eastern Cape municipalities.
The provincial local government department on Tuesday issued tender notices for a five-month contract to help “strengthen and support” Buffalo City Metro (BCM), Mbhashe, Nkonkobe and Ndlambe local municipalities.
The appointed company would help improve the municipalities’ recent audit outcomes, from qualified to unqualified audit opinions.
The department gave interested service providers until August 23 to submit their bids, specifying they were not obliged to accept the lowest or any bid.
Local government superintendent-general Stanley Khanyile said they were mandated by law to offer support to municipalities.
He said the municipalities were four of 19 which obtained qualified audits and were being assisted in their financial management controls.
Khanyile said the remaining 15 would be assisted by departmental officials, while the four contracted service providers assists, for five months, the four municipalities.
Asked why external support was being solicited when some of these councils had highly paid personnel, some hired to improve such audits, Khanyile said there were “deep rooted causes” preventing top municipal bosses from executing the “daunting” mission of clean audits.
The reality is there are critical challenges. There is lack of capacity
“There are problems in most of these councils. Ideally, for metros there should be no additional support. But look at both our metros, the reality is that there are critical challenges that exist.
“In some cases, there is lack of capacity. There are instances where internal controls need to be improved, proper record systems developed and reconciliations done, but often you find it does not happen,” Khanyile said.
BCM, which had seen its fair share of dismal audits in recent years, languishing between adverse and disclaimers, recently slightly improved to achieve a qualified audit status.
This came after city manager Andile Fani and chief financial officer Vincent Pillay were permanently employed to the two critical administration posts which was vacant for more than three years.
Mbhashe, which is under administration and has maintained a qualified opinion in recent years, this week re-advertised for its municipal manager’s post.
Ndlambe municipal manager Advocate Rolly Dumezweni said all critical posts in his council were filled, “but there is still need for external help”.
“We had a qualified for some years but we are struggling to graduate to an unqualified opinion. It’s not because we don’t know what to do or what is expected, but it is too expensive to comply.
“We were qualified over our asset register, landfill sites and water leakages. These things are expensive to address and we do not have capacity in terms of personnel,” he said.
His counterpart in Nkonkobe Municipality Khanyile Maneli said with or without external help, his council was on course to a clean audit. “We are not saying we don’t want the support.
“We’ve qualified audits for years, but even if the intervention was not there, we are on course to improving our books as we now have a chartered accountant acting in the CFO’s post which we are filling soon,” Maneli said.
Provincial auditor-general Singa Ngqwala’s 2011-12 report showed that none of the provincial councils obtained a financially unqualified audit with no findings.
Khanyile refused to divulge the amount the department would spend on the consultants, but the Dispatch last year reported that provincial departments spent more than R8.5-billion on consultants in the past three years.
Finance MEC Phumulo Masualle said at the time R2.9-billion was spent in 2009-10, R3-billion in 2010-11 and R2.7-billion in the 2011-12 financial years. He said R1.2-billion had been budgeted for such purpose in the 2012-13 financial year. — asandan@dispatch.co.za
Bhisho calls for help to clean audits
The provincial local government department on Tuesday issued tender notices for a five-month contract to help “strengthen and support” Buffalo City Metro (BCM), Mbhashe, Nkonkobe and Ndlambe local municipalities.
The appointed company would help improve the municipalities’ recent audit outcomes, from qualified to unqualified audit opinions.
The department gave interested service providers until August 23 to submit their bids, specifying they were not obliged to accept the lowest or any bid.
Local government superintendent-general Stanley Khanyile said they were mandated by law to offer support to municipalities.
He said the municipalities were four of 19 which obtained qualified audits and were being assisted in their financial management controls.
Khanyile said the remaining 15 would be assisted by departmental officials, while the four contracted service providers assists, for five months, the four municipalities.
Asked why external support was being solicited when some of these councils had highly paid personnel, some hired to improve such audits, Khanyile said there were “deep rooted causes” preventing top municipal bosses from executing the “daunting” mission of clean audits.
The reality is there are critical challenges. There is lack of capacity
“There are problems in most of these councils. Ideally, for metros there should be no additional support. But look at both our metros, the reality is that there are critical challenges that exist.
“In some cases, there is lack of capacity. There are instances where internal controls need to be improved, proper record systems developed and reconciliations done, but often you find it does not happen,” Khanyile said.
BCM, which had seen its fair share of dismal audits in recent years, languishing between adverse and disclaimers, recently slightly improved to achieve a qualified audit status.
This came after city manager Andile Fani and chief financial officer Vincent Pillay were permanently employed to the two critical administration posts which was vacant for more than three years.
Mbhashe, which is under administration and has maintained a qualified opinion in recent years, this week re-advertised for its municipal manager’s post.
Ndlambe municipal manager Advocate Rolly Dumezweni said all critical posts in his council were filled, “but there is still need for external help”.
“We had a qualified for some years but we are struggling to graduate to an unqualified opinion. It’s not because we don’t know what to do or what is expected, but it is too expensive to comply.
“We were qualified over our asset register, landfill sites and water leakages. These things are expensive to address and we do not have capacity in terms of personnel,” he said.
His counterpart in Nkonkobe Municipality Khanyile Maneli said with or without external help, his council was on course to a clean audit. “We are not saying we don’t want the support.
“We’ve qualified audits for years, but even if the intervention was not there, we are on course to improving our books as we now have a chartered accountant acting in the CFO’s post which we are filling soon,” Maneli said.
Provincial auditor-general Singa Ngqwala’s 2011-12 report showed that none of the provincial councils obtained a financially unqualified audit with no findings.
Khanyile refused to divulge the amount the department would spend on the consultants, but the Dispatch last year reported that provincial departments spent more than R8.5-billion on consultants in the past three years.
Finance MEC Phumulo Masualle said at the time R2.9-billion was spent in 2009-10, R3-billion in 2010-11 and R2.7-billion in the 2011-12 financial years. He said R1.2-billion had been budgeted for such purpose in the 2012-13 financial year. — asandan@dispatch.co.za
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