Category: Audit Opinion

Another Unqualified Audit for Garden Route District Municipality

Garden Route District Municipality (GRDM) has received its second consecutive unqualified audit. The Auditor-General (AG) attributed the Western Cape municipalities’ 2018/19 success to “effective leadership culture, the implementation of action plans, and established policies and procedures”.

Monde Stratu, GRDM Municipal Manager said: “we managed to reduce all deviations by almost half when compared to 2017/18 financial year.” This was one of the institution’s goals which was collectively achieved.

“I am proud of my administration and all the work they’ve put into retaining an unqualified audit status. Council’s oversight and support have also been invaluable,” said Stratu.

Putting good governance into practice is one of the reasons why the Western Cape Government has produced the best AG outcomes with 79% clean audits.  Earlier this year, GRDM hosted its first Good Governance Summit where it, among others, discussed topics such as:

  • accountability through the implementation of effective governance structures;
  • enhancing public participation processes through effective good governance structures and new innovations;
  • insulate municipalities against interference from external stakeholders
  • encourage and improve ethics and ethical conduct within municipal leadership

The MEC for Local Government at Western Cape Government, Anton Bredell, also voiced his opinion about audit outcomes and said: “Councils are increasingly struggling with severe ongoing financial constraints due to the country’s economic challenges.” At 74%, the province also had the highest number of auditees with good financial health status and there were no auditees with unauthorised expenditure. From the above, it is evident that there has been a solid and consistent pattern of good audit outcomes in the province.

Definition of various Audit Outcomes

Clean Audit Outcomes:

The financial statements are free from material misstatements and there are no findings on reporting on performance objectives or non-compliance with legislation.

Unqualified Audit Opinions:

The financial statements contain no material misstatements. Findings may have been made on either reporting on predetermined objectives or non-compliance with legislation, or both these aspects.

Qualified Audit Opinions:

The financial statements contain material misstatements in specific amounts, or there is insufficient evidence for us to conclude that specific amounts included in the financial statements are not materially misstated.

Disclaimer of Opinion:

On some occasions, an AQ is unable to complete an accurate audit report. This may occur for a variety of reasons, such as an absence of appropriate financial records. When this happens, the auditor issues a disclaimer of opinion, stating that an opinion of the firm’s financial status could not be determined.