Monday, December 15, 2008

City gets Clean Bill of Health from Auditor-General

By Mandisi Tyulu
15 December 2008

The Auditor- General has given the City of Cape Town an unqualified report for the financial year ending 30 June 2008 an indication that the city’s finances are being well managed. This is the fifth consecutive year that the City has achieved this.

Mike Richardson, the City of Cape Town’s Chief Financial Officer, has welcomed the report, saying it confirms the city’s financial resources are being managed in accordance with strict national guidelines. “This will give confidence to all our stakeholders that their money is in safe hands and that we have all proper financial controls in place,” he said.

Councillor Ian Neilson, Mayoral Committee Member for Finance said: “The unqualified report indicates to ratepayers that the City is managing the ratepayer’s money in a responsible manner and is conforming to the requirements of law. Their money is secure and expenditure is properly authorised. Adequate controls are in place to ensure that corrupt practices are strongly discouraged.”

The Auditor-General’s reports come in three categories:
· An unqualified report, which indicates that, overall, the city’s finances have been found to be in order. Concerns of a minor or technical nature are listed as “matters emphasised.”
· A qualified report is issued where there has been mismanagement, over-expenditure or unauthorised expenditure.
· A disclaimed report indicates major irregularities that should send out a red light to stakeholders.

There are two minor “matters emphasised” in the City’s unqualified audit report for the 2007/08 year. One relates to the lapse in the approval authority for the appointment of a labour broker, while the other concerns an amendment to comparative figures from earlier years.

The various stakeholders in the city’s finances will be reassured that all control processes appear to be in line with accepted standards and that the only concerns expressed are technical in nature.

To the national and provincial treasuries, the unqualified report means that the funds they have provided have been properly utilised and accounted for. Residents and ratepayers are also reassured that the money they have paid for rates and services has been spent prudently, while financial institutions can take comfort from the knowledge that their loans to the City are in safe hands, and will be repaid.

“The report will also give confidence to all our stakeholders that our financial systems are being run efficiently as we approach the FIFA 2010 World Cup”, said Richardson. “It indicates that we have the financial management skills required for the build-up to the FIFA 2010 World Cup and thereafter.”

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