In Monday’s Herald it was reported “Municipality (Kouga) receives second consecutive clean audit”. The article continues without further reference to “clean audit”, but rather an “unqualified audit”. This was followed up in yesterday’s (Tuesday) Herald with a tiny insert at the bottom of page four, easily missed, headed “Getting it right” which corrects the previous days headline stating it should have read “unqualified audit”.
Now whilst reading that article the word “unqualified” jumped out and immediately conjured up thoughts of impropriety, of fiddling of the books or possibly some creative bookkeeping! But NO, this is not the case at all for in fact it is just the opposite and an unqualified audit is preferable to a qualified audit. The word ‘qualified’ gives us a sense of peace and security. “It will be okay he is a qualified brain surgeon” would make one feel confident going under the knife but sitting in 1st class of an Airbus A380 about to take off and being told “it will be okay, the pilot is unqualified” would certainly not. English is a complicated enough language without our bean counters confusing us all the more by calling a good financial report an ‘unqualified audit’ and a not so good one a ‘qualified audit’.
So for those of us who thought unqualified was a negative here is the Auditor General’s explanation of the various audit categories taken from the AG’s website.
https://www.agsa.co.za/Auditinformation/Auditterminology.aspx
- CLEAN AUDIT OUTCOME:
The financial statements are free from material misstatements (in other words, a financially unqualified audit opinion) and there are no material findings on reporting on performance objectives or non-compliance with legislation. - FINANCIALLY UNQUALIFIED AUDIT OPINION:
The financial statements contain no material misstatements. Unless we express a clean audit outcome, findings have been raised on either reporting on predetermined objectives or non-compliance with legislation, or both these aspects. - QUALIFIED AUDIT OPINION:
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. - ADVERSE AUDIT OPINION:
The financial statements contain material misstatements that are not confined to specific amounts, or the misstatements represent a substantial portion of the financial statements. - DISCLAIMER OF AUDIT OPINION:
The auditee provided insufficient evidence in the form of documentation on which to base an audit opinion. The lack of sufficient evidence is not confined to specific amounts, or represents a substantial portion of the information contained in the financial statements.
Back to the report… Whilst the AG congratulated the municipality on the audit, which incidentally is just one away from the top, a ‘clean audit’, the article did make mention that “performance management, adherence to municipal governance laws and stability in leadership” needed to be improved.
Having attended several St Francis Bay Residents Association meetings over the past months it is this “performance management and adherence to municipal governance laws” that seems to be a regular subject of criticism of the council by the SFBRA . Their unwillingness to respond to matters raised with the council seemed to deteriorate into a downright refusal until apparently the powers in Bisho stepped in and instructed the Kouga council to respond. Whether they, KM, have adhered to this instruction is uncertain for St Francis Today has had no feedback either way but will attempt to follow up and advise.
So from the above, apart from performance, governance and leadership, it appears our municipality is running a clean financial ship even if there are a few spots of rust here and there.
A little concerning however is the article appearing directly above the article in Monday’s Herald on the Unqualified Audit where ANC Councillor Phumzile Oliphant has requested that municipal manager Sydney Fadi establish if officials from the local economic development department had ‘dished out’ tenders to companies not on the municipal database. The question must be … are there other incidences that are not being investigated?
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