Finance

The Western Cape Provincial Treasury acknowledges the positive audit outcomes achieved
for the 2024/25 municipal financial year. Twenty municipalities attained clean audits, five
received unqualified audit opinions with other matters, and a total of 25 municipalities
achieved the globally recognised benchmark of an unqualified audit opinion.
These outcomes are the result of sustained commitment by municipal councils and
administrations, supported by structured, collaborative governance interventions led by
Provincial Treasury in partnership with the Department of Local Government. Our shared
approach is anchored in the principles of the Municipal Finance Management Act, cooperative
governance, and a culture of proactive financial oversight and accountability.
(a) Provincial Treasury’s Local Government Accounting support interventions have
contributed materially to improved audit outcomes, including the achievement of clean
audits, by addressing systemic weaknesses in financial management, reporting, and
governance.
It must however be emphasised that audit outcomes remain the primary responsibility of
municipal councils and their administrators. Provincial support serves to enable,
strengthen, and sustain municipal efforts.
The following coordinated support initiatives have directly contributed to improved audit
performance:
• Annual Financial Statement Consistency Workshop: Expanded from a provincial to
a national conference under the Western Cape Government (WCG) coordination,
this initiative has reduced material misstatements by systematically addressing root
causes of accounting errors and governance failures. Material misstatements are the
primary cause of a municipality not achieving a clean audit.
• Audit readiness engagements: These are conducted prior to each audit cycle to ensure
municipalities are prepared for their annual audit, with corrective measures
implemented either in the current or following financial year.
• Weekly Provincial audit steering committee meetings: These forums enable rapid
identification and resolution of transversal audit issues by convening the relevant
technical and governance officials in real time. Multiple departments and key
institutions /role-players in the WCG attend these committee meetings.
• Observer role in municipal audit steering committees: Upon invitation, Provincial
Treasury provides real-time access to audit complexities, offering on the ground
support during the audit process.
• Quarterly monitoring of audit action plans: Findings are formally reported to
municipalities and the National Treasury, reinforcing consequence management and
accountability for remediation.
• Analysis and distribution of a sanitised Consolidated Management Report together
with an in-depth analysis of findings: This assists municipalities in identifying
transversal audit findings and emerging audit focus areas, enabling pre-emptive
corrective action.
• GRAP update training and mSCOA support: Continuous capacity building ensures
compliance with evolving accounting standards and the municipal standard chart of
accounts.
• IGR support forums (Municipal Accountants Forum, Accounting Working
Committee, CFO Forums): Keep municipal finance officials informed of latest
developments, fostering peer learning and consistent application of MFMA
requirements.
• Inputs into key national forums and meetings including National Treasury and the
Accounting standards Board.
These interventions have strengthened governance, improved financial statement
quality, and reduced the prevalence of material findings. Nevertheless, clean audits
remain a testament to municipal leadership and internal controls, which Provincial
Treasury supports, but does not replace.
(b) (i) Provincial Treasury does not directly disburse grants or project funding to
municipalities specifically for audit support. Instead, our financial assistance is delivered
through funded training and capacity building programmes, including:
• GRAP update training – fully funded by Provincial Treasury to ensure
municipalities remain compliant without bearing the cost burden.
• National Annual Financial Statements (AFS) Consistency Workshop
coordination – financial and logistical resources provided by Provincial
Treasury to enable this conference at no cost to participating municipalities.
• Support forums (CFO Forums, Accountants Forum, Accounting Working
Committee) – funded and facilitated by Provincial Treasury to provide
continuous, no cost access to technical updates and peer learning.
The Provincial Treasury’s Local Government Accounting investment in structured
training, workshop coordination, and ongoing technical support represents significant
financial assistance in kind, aimed at reducing municipal exposure to audit risks and the
associated financial consequences of noncompliance.
Provincial Treasury additionally provides direct funding to municipalities through the
Financial Management Capability Grant. Some of the projects funded through this grant
assists municipalities to respond to findings raised by the Auditor General, but that is
never the sole purpose of a grant allocation. For example, in 2025/26 this grant funded
the asset management projects in two municipalities, while this work will help to
address findings made by the AGSA, improving asset management is a priority in its
own right and form part of Provincial Treasury’s broader mandate to support improved
financial governance. Provincial Treasury is cognisant that improved financial
governance should, in due course, lead to improved audit outcomes.
(b)(ii) The following forms of technical assistance form the core of Provincial Treasury’s
Local Government Accounting municipal support model:
• Financial management support: Daily operational support via the dedicated
helpdesk (pthelpme@westerncape.gov.za) addressing accounting, auditing, legal,
and regulatory matters.
• Audit preparation support: Audit readiness engagements, pre and post submission
review of the Annual Financial Statements and holding an observer status in
municipal audit steering committees.
• Governance and compliance support: Quarterly monitoring of audit action plans,
analysis of transversal findings, and distribution of sanitised Consolidated
Management Report Analysis to identify new audit focus areas.
• Training and capacity building: GRAP update training, mSCOA support, and
structured learning through Municipal Accountants Forum, Accounting Working
Committee, and CFO Forums.
• Financial statement review processes: Formal review of AFS prior to submission
to the Auditor General and again after submission, enabling municipalities to
institute corrective measures within the current or next financial year.
• MFMA compliance monitoring: Weekly Provincial audit steering committee
meetings from the beginning of September to the end of November to evaluate
transversal issues and mobilise the right technical and governance officials for
rapid resolution.
• Data analytics and benchmarking: Use of sanitised Consolidated Management
Report Analysis to benchmark municipal performance and identify recurring or
emerging audit risks.
• Support forums and workshops: National AFS Consistency Workshop, CFO
Forums, Accountants Forum, and Accounting Working Committee – all
structured to ensure municipal portfolios remain abreast of latest developments in
accounting and mSCOA.
In conclusion, the Western Cape Provincial Treasury remains unequivocally committed to
sustaining and deepening municipal financial governance, accountability, and clean
administration. Through structured intergovernmental collaboration with the Department of
Local Government and by maintaining a proactive, evidence-based support model, we will
continue to strengthen a clean governance culture across all municipalities.
Our support evolves in line with emerging risks, audit findings, and the changing regulatory
environment, always respecting that the ultimate responsibility for audit outcomes rests with
municipal councils and administrations. The positive 2024/25 audit outcomes provide a strong
foundation, and we will build on this through continued vigilance, capacity building, and
cooperative governance.