A key programme of the Local Government Turn Around Strategy (LGTAS) is Operation Clean Audit 2014. The main purpose of Operation Clean Audit 2014 is to address challenges faced by municipalities and provinces with the management of audits, especially audit findings and queries from the Auditor-General. The goal of the campaign is to seek to achieve Clean Audits in Municipalities and Provincial Government departments by 2014.
Strong political leadership to support the administrative capacity in both municipalities and provincial government departments is necessary for government to achieve the objectives of this campaign. We still have some distance to go towards the achievement of sound financial management in municipalities, but with the results presented today by the Auditor-General, there is definitely improvement compared to the past.
While in the 2004/05 financial year there were 61 municipalities which received financially unqualified audit opinions, this figure increased to 94 in the 2007/08 financial year, 117 in the 2008/09 financial year and 127 in the 2009/10 financial year.  While only 2 municipalities received clean audits in the 2004/05 financial year, (financially unqualified with no other matters of concern), there were 4 in the 2008/09 financial year; and 7 in 2009-10.
These are: Ehlanzeni District Municipality, Steve Tshwete Local Municipality and Victor Khanye Local Municipality in Mpumalanga;  Metsweding District Municipality in Gauteng; Frances Baard District Municipality in the Northern Cape; Fetakgomo Local Municipality in Limpopo, and Cape Town.
Fetakgomo Local municipality in Limpopo is one of the smallest rural municipalities in the country. Their achievement suggests that achieving a clean audit is within the grasp of any willing and determined municipality. Mpumalanga Province must be applauded for this outstanding achievement, that half of all the clean audits in the country come from that Province only.
It needs to be re-emphasized that the primary responsibility to achieve clean audit outcomes remains that of municipalities, and in this regard it is the municipal political leadership which must set the right tone and foster the right culture. National and provincial government will provide support, but the primary responsibility to address the challenges resides with municipalities.
It is with the above understanding that the Councilor Induction training programme is currently unfolding throughout the country. The training is aimed at equipping the new councilors with a good understanding of their responsibilities, including good financial management. With the support provided by both the provincial and national departments, strong political will and the structures put in place to support Municipalities, nothing stops us from improving on the 2009-10 audit outcomes in the next reporting period.
Provincial Coordinating Committees (PCCs) have been established with key drivers being the provincial departments responsible for Local Government and Provincial Treasuries. In some provinces the Premier's Office participates in these structures.
The PCCs meet at least quarterly and Municipalities report on progress they are making in implementing their audit remedial action plans in response to issues raised by the Auditor-General. This is intended to provide guidance where that is needed. The PCCs exchange information, including on best practices.
Providing guidance on the establishment and functioning of Municipal Public Accounts Committees (MPACs). The department and National Treasury are in the process of finalising a Municipal Finance Management Act Circular which will be issued to municipalities by the National Treasury to increase the number of MPACs from the present 103 and to improve their effectiveness.
In partnership with the South African Local Government Association (SALGA), the Association of Public Accounts Committees (APAC) and the National Treasury, MPACs will also be provided with training.
The department, again in partnership with the National Treasury, will embark on a process of determining the reasons for the failure of some municipalities to establish Internal Audit Units and Audit Committees, and provide recommendations on appropriate intervention measures.
CoGTA has established an Inspectorate to fight fraud and corruption. With the support of this unit, Municipalities will be assisted with developing fraud prevention plans and launch ethics campaigns in municipalities. The Inspectorate will also support provincial departments responsible for Local Government to initiate preliminary investigations and the referral of serious allegations.
To improve financial management and audits, CoGTA is also to discuss with National Treasury the possibility of ensuring that every municipality appoints a Chartered Accountant.
We need to build on the advances gained in the audit outcomes in recent years and intensify the Operation Clean Audit 2014 Campaign so that we achieve the targets set for 2014.