The Auditor General of South Africa released a report on the financial health of the Nelson Mandela Bay’s metropolitan municipality on 30 July 2014.
“Wouldn’t it be great to tell the metro’s 1 152 115 citizens (official 2011 census figures) a bit of good news,” I thought.
In the report a green icon shows progress, a yellow icon indicates stagnation and a red icon shows regression. There are no green icons in the report I am afraid and only one red icon for Financial and performance management with all the other areas showing stagnation.
The Nelson Mandela Bay Metropolitan Municipality once again received a Qualified Audit which the Auditor General defines as; “The financial statements contain material misstatements in specific amounts, or there is insufficient evidence for us to conclude that specific amounts included in the financial statements are not materially misstated.”
One also needs to be aware that, unlike in private sector audits, the AGSA’s audit scope in the public sector is much broader. Besides the audit of financial statements, it also covers reporting of performance against predetermined objectives as well as compliance with laws and regulations.
The Auditor General found the following areas of concern for NMBMM:
No movement in audit outcome
The stagnation in the audit outcome was due to political and administrative instability, which filtered through to the key functional areas of the municipality. This was evident in the municipality not responding to our recommendations, a weak control environment and a lack of accountability, which resulted in previously reported matters recurring