Deputy Speaker and hon colleagues, before I proceed, let me, with your kind permission Deputy Speaker, invite the House to join me in once again complimenting our supreme audit institution, the Auditor- General, for continuing to be the best public institution in the world; both in the developing and the developed world. [Applause.] They continue to hold the number one spot in that regard.
Now the Public Audit Act 2004 mandates the Standing Committee on the Auditor-General - which I am privileged to chair - to perform oversight on the institution. In addition, section 2.3.1 and 2 of the Act provides that the committee must assist the Auditor-General in order to ensure the independence, impartiality, dignity, and effectiveness of the Auditor- General and advise the National Assembly accordingly. To this end, and also in support of the 2014 clean audit campaign, the committee joined the road shows of the Auditor-General from 16 to 18 April, as well as 18 to 20 April 2012, on audit outcomes for the 2010-11 financial year of several municipalities in the North West province and the eThekwini Metro Municipality in KwaZulu-Natal respectively.
On these visits, the committee observed that - in support of an ultimate audit outcome of unqualified audit opinions with no findings on predetermined objectives or compliance with laws and regulations - the Auditor-General leadership in the provinces embarked on an intensified programme to enhance its visibility, with the objective of improving the effectiveness of the audit process and engaging with all role-players who could influence clean administration. To this end, the audit teams paid regular visits during the audits, and meetings were held with those charged with governance on a quarterly basis, highlighting deficiencies in controls intended to address findings raised in the previous years' audit and management reports.
The committee, having interacted with the leadership of these municipalities - including mayors, speakers, members of provincial executive councils, and other councillors - and having made numerous observations, positive and negative, contained in detail in this report, makes the following recommendations amongst others: firstly, the Auditor- General should immediately, during the audit period, bring to the attention of the committee the list of municipalities that resist to render all reasonable assistance to the Auditor-General or the authorised auditor performing the audit to enable them to complete the audit within the applicable time frames as prescribed by the Public Audit Act; secondly, the Auditor-General should promptly notify the committee when a municipality defaults on payment of audit fees; and, thirdly, the Auditor-General should charge interest on any municipality's account not paid within 30 days of the date of the account at the rate prescribed by legislation.
The SA Local Government Association, Salga, and the Department of Co- operative Governance and Traditional Affairs, Cogta, should assist the municipalities in ensuring that administrative systems and the information necessary to prepare budgets - for example, Integrated Development Plans,IDPs - are in place. Municipal accounting officers should ensure that revenue and expenditure are properly recorded and monitored to ease audit processes. Municipalities should ensure that strengthening corporate governance is a key managerial responsibility to ensure sustainability and to augment corporate value as one of the missions entrusted to management by the citizens to promote clean governance and achieve clean audits in 2014.
I would like to commend this report to the House on behalf of the ANC and I think the committee as a whole. I thank you. [Time expired.] [Applause.]
There was no debate.
Speaker, I move -
That the Report be adopted. Declarations of vote:
Madam Deputy Speaker, I think these oversight visits are very important. They certainly speak to what one of my predecessors, Helen Suzman, said in this House: "Go and see for yourself". The visits to the North West and KwaZulu-Natal provinces were certainly very instructive in this regard. It provided a snapshot of the state of local government in those particular provinces, as well as some of the challenges that are being faced there.
It was also very interesting to note that the challenges being experienced there were hardly unique to the North West and KwaZulu-Natal provinces. In fact, they have a broader application around the rest of South Africa. One of the major initiatives that the report recommends is the support of Municipal Public Accounts Committees, MPACs, in the various municipalities. To this, we can only say "Amen".
However, the problem is with the way these MPACs are currently structured within the Department of Co-operative Governance and Traditional Affairs, Cogta, family. The monitoring and control is focused on quantitative rather than qualitative assessments of how these MPACs are working. It is simply not good enough to say we have 245 MPACs around the country, without doing a proper assessment of whether these MPACs are actually functioning and performing the key tasks that should be done. We therefore recommend, in various other forms, that key performance indicators are put in place to assist these. The same goes for internal audit capacities.
It was also very instructive to note some of the real, serious problems being experienced in these municipalities when we visited there. Here we have to say we agree wholeheartedly with the Auditor-General's frustration at the lack of consequences. Too many of the municipalities have had repeated disclaimers. They have had repeated failures to submit annual financial statements, and yet the same municipal leadership and officials stay at the helm of these municipalities. It is high time that we started having a discussion in this House about consequences for municipalities, municipal officials, and municipal office bearers who continuously fail to perform.
We also note that the eThekwini Municipality spoke to us at length about the ongoing Manase Report investigation, and it is mentioned in this document. We believe it is entirely problematic that this report remains unreleased despite two missed deadlines to release it publicly. It is now starting to have the stench of a cover-up, and we would urge the eThekwini Municipality to release the Manase Report as soon as possible. In conclusion, I would like to thank the chairperson and fellow members of the committee for a very interesting few days, as well as the committee officer, Johnny Ramrock, and others, who provided the administrative and capacitative support. Thank you. [Applause.]
Deputy Speaker, I will have to play two roles - as the chairperson and an ANC member! On behalf of the ANC, let me respond to some of the comments made by my colleague, the hon Steenhuisen, on behalf of the DA. Indeed, as the ANC, we support the sentiment that-over and above the very precise and very insightful recommendations and observations made by the Auditor-General-we need a very strong oversight mechanism at all three levels of government, starting with this Parliament. It is critical that the findings and recommendations of the Auditor-General are carried through, so that we do not have a repetition of the same errors that need to be corrected year in and year out.
One emphasis, in particular, is auditors have to put the necessary systems in place to ensure that the system is as foolproof as possible. It should have red lights indicating faults in the system, or any abuse of systems, timeously so that interventions and corrections can be effected. We will support any recommendations that say we, the oversight authorities at national, provincial and local level, should do our part in ensuring that the work of the Auditor-General is not concluded in vain. We must ensure that the committees, especially portfolio committees, which are closest to the respective government departments, and the MPACs in the municipalities, perform their role of oversight. This will ensure that the administration actually implements these recommendations. We will support those sentiments. Thank you. [Applause.]
Motion agreed to.
Report accordingly adopted.