CAREER’S CORNER: SAICA urges government to promote an ethical culture to attract and retain professionals
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GUEST - Natashia Soopal, Senior Exec for Ethics Standards and Public Sector at SAICA
The South African Institute of Chartered Accountants (SAICA) urges government to fast track professionalisation of local government finance units. This follows the Auditor-General (AG), Tsakani Maluleke’s presentation on the 2021-22 Local Government Audit Outcome to the Standing Committee of the Auditor-General (SCOAG) on Wednesday, 31 May which continues to reflect poor audit outcomes as a result of poor financial planning, inadequate financial controls, skills and capacity, governance and accountability.AG Maluleke noted that, “Local government has been characterised by dysfunctional municipalities, financial mismanagement, council and administrative instability, and crumbling municipal infrastructure.
This leads to deteriorating standards of living and service delivery failures, resulting in service delivery protests. I firmly believe that service delivery improvements will be enabled by capable, accountable and citizen-centric municipal leadership delivering on their mandates to improve the lives of ordinary South Africans.” The AG identified that there was a lack of proper management of available funds which exerted pressure on local government’s finance thereby reducing its service delivery potential. This is evidenced by local government incurring fruitless and wasteful expenditure amounting to R4,74 billion rands, as well as incurring an estimated financial loss of R5,19 billion rands through non-compliance and fraud as identified through the material irregularities process. It was further noted that despite the salary cost of finance units amounting to R10,75 billion, municipalities still required the assistance of consultants to support them with financial reporting due to lack of skills and vacancies.
Payments to consultants amounted to R1,6 bn (R1,36bn in 2020-21) which is 13% of the total financial reporting cost of R12,36 billion. Furthermore, Chief Financial Officer (CFO) vacancies was 22% whilst CFOs spent an average of 49 months in the position. The vacancies and instability in leadership within municipalities and finance units also resulted in inadequate financial controls, governance and accountability being implemented. Natashia Soopal, Senior Executive for Ethics Standards and Public Sector at SAICA, says that local government finance units play a critical role in managing public funds, ensuring accountability, and optimising service delivery. “By cultivating a highly skilled workforce, local governments can improve audit outcomes, financial management practices, and service delivery. While professionalisation is crucial, an ethical environment is equally vital.
The South African Institute of Chartered Accountants (SAICA) urges government to fast track professionalisation of local government finance units. This follows the Auditor-General (AG), Tsakani Maluleke’s presentation on the 2021-22 Local Government Audit Outcome to the Standing Committee of the Auditor-General (SCOAG) on Wednesday, 31 May which continues to reflect poor audit outcomes as a result of poor financial planning, inadequate financial controls, skills and capacity, governance and accountability.AG Maluleke noted that, “Local government has been characterised by dysfunctional municipalities, financial mismanagement, council and administrative instability, and crumbling municipal infrastructure.
This leads to deteriorating standards of living and service delivery failures, resulting in service delivery protests. I firmly believe that service delivery improvements will be enabled by capable, accountable and citizen-centric municipal leadership delivering on their mandates to improve the lives of ordinary South Africans.” The AG identified that there was a lack of proper management of available funds which exerted pressure on local government’s finance thereby reducing its service delivery potential. This is evidenced by local government incurring fruitless and wasteful expenditure amounting to R4,74 billion rands, as well as incurring an estimated financial loss of R5,19 billion rands through non-compliance and fraud as identified through the material irregularities process. It was further noted that despite the salary cost of finance units amounting to R10,75 billion, municipalities still required the assistance of consultants to support them with financial reporting due to lack of skills and vacancies.
Payments to consultants amounted to R1,6 bn (R1,36bn in 2020-21) which is 13% of the total financial reporting cost of R12,36 billion. Furthermore, Chief Financial Officer (CFO) vacancies was 22% whilst CFOs spent an average of 49 months in the position. The vacancies and instability in leadership within municipalities and finance units also resulted in inadequate financial controls, governance and accountability being implemented. Natashia Soopal, Senior Executive for Ethics Standards and Public Sector at SAICA, says that local government finance units play a critical role in managing public funds, ensuring accountability, and optimising service delivery. “By cultivating a highly skilled workforce, local governments can improve audit outcomes, financial management practices, and service delivery. While professionalisation is crucial, an ethical environment is equally vital.
