Contents

• Introduction

• Leadership

• What did we do?– Action Plan– Strengthen Oversight

• Conclusion

Introduction

• A Clean Audit has major advantages for any municipality because:– It instills confidence to the Ratepayers which

results in improved revenue collection– Instills confidence in would be investors– Promotes the culture of good governance– Ensures sound financial management

Western Cape Lead

Financial Years National Clean Audits W/C Clean Audits

2009/2010 7 1

2010/2011 13 2

2011/2012 9 5

• To obtain a Clean Audit requires good leadership

• Leadership means:– The Mayor– Municipal Manager– Chief Financial Officer– All Councillors– Senior Managers

• It is everybody’s business

Leadership

What did we do- The Action Plan• We have taken the Management Letter

and created an Action Plan– All comafs were listed in the action plan– All the issues raised by the IA were also listed in

the Action Plan

• Regular meetings were held with all affected officials to report on what they doing to rectify or avoid recurrence

• Quarterly feedback is submitted to AG and Province

No Audit Finding Detailed Finding AG recommendation Management response Progress to dateResponsible

person

3. EX.22 - (COMAF 18) No agreements in place

 

Contractual agreements for land sales in respect of long term debtors between the municipality and home owners of scheme 135, Bonnievale, could not be provided. During the process of amalgamation the documentation was to be transferred from Bonnievale to Ashton but had been misplaced and cannot be found.

It is recommended that management regularly review and confirm the review all control reconciliations in order to ensure that information available for reporting is complete and accurate.

This agreements as kept by the former Bonnievale Municipality, was transferred to Ashton with the amalgamation process nearly 10 years ago as indicated. Steps will be taken to try to find the agreements.

 

Copies of the contracts were found.

Mr J de K Jooste

Ms J Louw

 

No Audit Finding Detailed Finding AG recommendation Management response Progress to dateResponsible

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4. EX.15 - (COMAF 13) Useful lives incorrect

In terms of paragraph 92 of Generally Recognized Accounting Practice (GRAP) 102 – Intangible assets, the useful life of an intangible asset that arises from binding arrangements (including rights from contracts) shall not exceed the period of the binding arrangement, but may be shorter depending on the period over which the entity expects to use the asset. If the binding arrangements (including rights from contracts) are conveyed for a limited term that can be renewed, the useful life of the intangible asset shall include the renewal period(s) only if there is evidence to support renewal by the entity without significant cost.

Management should assess the useful lives of intangibles assets based on the period the intangible asset will be in use.

 

Management  agrees  with the  audit  finding  as  it relates  to  the  internal control deficiency.Management will implement the recommendation and assess the useful lives of intangible assets from 01 July 2012 based on the period the intangible asset will be in use.

As from 1 July 2013 all intangible assets useful lives are changed to be the same as the licence agreements. 

Mr. CF Hoffmann

Mr. B Brown

What did we do?- Bid Evaluation Committee• Regulation 44 of SCM is the key issue for

most municipalities

• Proper evaluation of tenders

• Established a permanent Bid Evaluation Committee (BEC)– Ensure consistent application of requirements– Proper training of BEC Members

What did we do? Strengthen Oversight

• Competent Audit Committee• IA Unit must be functionally competent

– Implement a proper Audit Plan

• Compliance Officer– Follow a compliance programme– Advise MM on compliance matters– Compile and Administer a Risk Management

Programme

What did we do? Preparation plan for the AG• Every year in May the BTO prepares a

Plan for the end of the year and compilation of AFS– Timelines for requisitions and receipt of invoices– Information required for the Audit File– Responsible persons are identified to provide the

required information

• Audit Committee must review the AFS

• Draft AFS are given to AG to comment of the record

Conclusion

• The myth that clean audit does not contribute to service delivery is incorrect because:– Compliance with Laws and Regulations– Sound Financial Management– Predetermined Objectives which is service

delivery

DIE EINDE

Dankie

Enkosi

Thank You