Senqu Municipality Clean Audit best Practice

Senqu Municipality

Clean Audit best

BACKGROUND

_{Senqu Municipality is a semi rural Municipality}

situated in the Joe Gqabi District of the Eastern Cape.

The Municipality has a total population of 134 150 people.

The municipality constitute of the following towns:

_{Rossouw, Rhodes, Barkly East, Sterkspruit}

and Lady Grey where the seat of the council is situated

BACKGROUND CONTINUES…

Before achieving this Clean Audit , the

municipality had a record of 5 Unqualified Audit opinions

This achievement of a “CLEAN AUDIT” came as a process and not an event

_{The municipality had a lot of changes to make}

and systems to adjust in order to achieve this objective.

BACKGROUND CONTINUES…

A Clean Audit was only possible when it was made a key Organisational Objective with

Council and the Accounting Officer setting the tone at the top.

A Conducive Municipal Environment with the following minimum norms must exists to

Conducive Municipal Environment

Proper Oversight Function performed by Municipal Councils

The Accounting Officer must ensure that each Director is held responsible for

different responsibilities assigned to them

_{Creating a Deadline Orientated Culture with}

consideration given for effective corrective action and accountability

Conducive Municipal Environment

Clear and Effective Interdepartmental Communication must exists

Effective and uniform Document management and Filling Systems

Adherence to Good Financial Management Principles and effective Internal Controls

Effective Monitoring and Reporting Functions

OPCAR

The Operation Clean Audit Report is of Great Importance.

A tool to address All issues raised in Audit Report and Management Report from AG.

Also ensure that issues raised in previous years reports is addressed sufficiently

This was backed up by evidence that passed internal audit tests

Key Technical Performance Issues

 Develop pre-determined objectives that are SMART (specific, measurable, achievable, realistic and time-bound)

 Audit committee and internal audit to monitor the Strategic and Annual Performance Plans and make comments on progress.

 Systems to be developed to report achievement against

pre-determined objectives on a monthly basis. This involves aligning the performance reporting systems to extract the required information from the financial reporting systems.

 Audit committee and internal audit to review final report of

performance against pre-determined objectives together with financial information prior to submission to MM/Mayor.

Key Technical Performance Issues

 Quarterly Controls

 Quarterly performance and financial reports are prepared against predetermined objectives and approved by the MM before they are submitted to the Mayor.

 Audit committee and internal audit to review the actual performance against pre-determined objectives and

financial information on a quarterly basis and should submit their reports thereon to MM/Mayor for further action.

 Council to ensure that the corrective measures

Key Technical Performance Issues

Monthly controls

 _{Record management of supporting}

documentation relating to predetermined objectives and financial information.

 Monthly financial and performance

reporting to MM by programme leaders on predetermined objectives

Key Issues for Performance &

Finance

Principles to Adhere to:

_{Timelines (Daily, Weekly, Monthly)} Accuracy

Separation of Duties ( Prepare , Review and Approve)

_{Sufficient Supporting Evidence –that can be}

produced

Key PAF Issues (Finance & Other)

Everything needed by the AG must be in the Preparation of Audit File (PAF)

PAF deals with the detail substantiation of information between different sources.

_{OPCAR is the monitoring tool relating to}

correct previous years findings and is forming an important part of the PAF

Documents in the PAF

• Documents from the Administration

• Documents from the Budget Division

• Documents from Compliance & Performance

• Documents from Finance

• Documents from Corporate

Administration Docs



 Contacts of key staff

 _{Any changes that presents a difference}

Docs from the Budget Division

 Approved SDBIP ( current & previous year)

Adjustment Budget

Approved Budget

Docs from Compliance & Performance

 New legislation

Details of Legal council

List of investigation & criminal behaviour

Appoved IDP

IDP & Budget Preparation Schedule

Performance scorecards & Agreements

Documents from Finance

 Current and previous years AFS

Investments register

_{Listing of funds received} Finance related policies

 Accounting policy

Accounting system Details ( any changes)

Accounting business processes

Documents from Corporate

 Minutes of all political & admin structures

Council

Executive Committee

SCM Evaluation & Adjudication

 HR policies

Organogram (incl vacant positions)

Documents from the Internal Audit

 Audit Committee Minutes

_{Audit Committee Members}

Internal Audit Committee Charter

Internal Audit Plan

List of and Internal Audit Reports

Finance Accounting Schedules & Docs

Accumulated Surplus (Reconciled)

Grants register

Register of all Grants (eg: MSIG, MIG, ES, MFMG ..)

Reserves Schedules (cash backed!)

 Capital Replacement Reserve

Liabilities & Provisions

 Loans Register

 Loans Repayment Schedules

 Any other Loan Agreements

 Lease & Finance contracts & calculations

Landfill sites ( lifespan cost & provision)

Employee Costs Analysis

Post Retirement Benefits

Long Service Awards

_{Bonusses & Performance Bonusses} Leave Provisions

Reconciliations

Current portions

Compensation Commissioner

Debtors – Creditors - Taxes

Balanced deposits register

_{Connections & Disconnections Register} List of Creditors

Also list of Debtors with Credit balances

 VAT Recon (EMP201’s)

 EMP 501 (Submitted to SARS)

Assets & PPE

Asset register

Additions

Disposals & council resolutions thereto

Depreciation

Residual Values

Useful lives review & condition assessment

 Capital projects

 Infrastructure unbundling

 Electrical Infrastructure unbundling

Assets & PPE

Land held for sale

Auction (notice & resolution)

Investment Property Register

Valuers movements & journals

Intangible Assets

Cash & Valuation Roll

_{Monthly Bank Reconciliations} Bank Statements

Any Cash Advances

Valuation Roll

Property Tax Recon

Valuations by Type

Tax Clearances

Service Charges & Income

Approved Tariff Structure

NERSA letter of approved tariffs

_{Electricity losses}

Notice of advert (date of tariff application)

Fines (Reconciliation)

Agency services income (SLA & reports)

Rental Charges (registers)

Expenses

General Expenses

Backed up by vouchers duly authorized

Audit fees (schedule)

Notes to AFS (Detail)

SCM declarations, wasteful & unauthorized

 _{& Irregular expenditures}

Third party transactions, minor breaches

PAF Dependent on the following

_{Stable political and administrative municipal}

environments

_{Accountable administration with appropriate &}

reliable accounting systems.

Thorough planning and monitoring of activities

AG & other critical relationship value adds.

Year end, AFS & annual report preparation plan.

Financially sustainable to deliver services.

CONCLUSION

KEY PRINCIPAL PLAYERS

Mayor: Cllr N Mtyali

Municipal Manager: Mr. MM Yawa Directors :Mrs. P Bushula Mr. CR Venter Mr. R Crozier Mrs. L Gologolo Mr. Wonga