The MoLM records did not allow the application of alternative audit procedures. Consequently, the auditors were unable to confirm the valuation, existence and completeness of trade creditors amounting to R3,5 million as disclosed in the financial statements. Included in the bank reconciliation of the municipality's main account were unknown deposits to the amount of R2,5 million. The money was deposited in the municipality's account before year-end but was not recorded in the accounting records of the municipality. The accounting system in use by the municipality incorrectly calculated input VAT at a rate of 9 per cent instead of the legislated rate of 14 per cent as per the Value Added Tax Act, No. 89 of 1991. As a result the municipality was claiming less VAT input than it was entitled to.