26 August 2022
Media Statement
Rustenburg – The North West Provincial Treasury is well on its road to ensure that municipalities submit quality Annual Financial Statements by the end of the month. The department has in collaboration with SALGA, National Treasury and provincial department of COGTA invited officials responsible for AFS’ compilation from municipalities to a statements review working session. The working session’s focus is on the practical review of the AFS before submission date and major areas to look at.
When opening the session, the Chief Director: Municipal Support Ms. Linda Nengovhela has asserted to invited municipal officials that audit reports from previous financial years have shown recurring indications that contribute to undesirable outcomes. “We are here to work together, to help each other produce good quality statements for submission while ensuring the no-repeat of flagged indicators” she said. Ms Nengovhela says the department takes this exercise with the seriousness it needs, that is why there was a need to invite the Provincial Accountant General, Mr Geo Paul, who has a wealth of knowledge and experience spanning over 25 years in the accounting sector.
The Auditor-General of South Africa has, indicated in the 2020/21 consolidated MFMA report that 75% of municipalities in the country are struggling to submit quality Annual Financial Statements. The department has invited municipal officials responsible for, or whom are part of the AFS preparation teams – amongst others, Chief Financial Officers, Internal Auditors and Chief Audit Executives. This is to ensure that they are exposed to critical areas that add value to prepared statements, with capacity development at the top of mind.
The practical review of AFS’ working session focused on key GRAP (Generally Recognised Accounting Practice) implementation challenges affecting municipalities, also to provide context and understanding of the GRAP requirements and the underlying AFS information required. Forming part of the focus areas included information gathering procedures, which form part of AFS considerations or recognition, measurement and disclosure of transactions and balance in the AFS.
In the previous financial year reporting (2022 MFMA Report), the AGSA has stated that “the poor quality of the financial statements submitted for auditing does not bode well for the credibility of municipalities’ in-year financial reporting, as it means that decisions, analyses and monitoring could be based on unreliable information.” The working session has seen different accounting and audit professionals from municipalities share ideas and their understanding of certain terms and triggers for concerning audit outcomes as they will be finalising their AFS’ for submission.
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Issued by North West Provincial Treasury
Contact: Ms. Kesalopa Gill0795486352 | 0183883584 | kgill@nwpg.gov.za