Municipal Timeline

Municipalities to receive audited Financial Statements from the AG

Posted on by The CAN Team

Section 126(3) of the Municipal Finance Management Act outlines the Auditor-General’s role and responsibilities in the auditing process for municipalities and municipal entities. It emphasizes the timeliness and accountability of the audit process. Below is an explanation of its key aspects:

Key Provisions of Section 126(3)

  1. Auditor-General’s Obligation to Audit:
    • The Auditor-General is required to audit the financial statements submitted by municipalities and municipal entities as part of their annual financial reporting obligations.
    • This ensures that the financial statements comply with legal standards, reflect accurate financial performance, and are free of material misstatements.
  2. Timely Submission of the Audit Report:
    • The Auditor-General must submit an audit report on the financial statements to the relevant municipal accounting officer within three months of receiving the financial statements.
    • This deadline ensures prompt feedback on the financial health and governance of the municipality or municipal entity, facilitating timely decision-making and corrective actions.

Implications of Non-Compliance

If the Auditor-General fails to meet the three-month deadline:

  • Section 126(4) mandates that the Auditor-General must submit a report explaining the delay to the relevant municipality or municipal entity and to legislative bodies, including the provincial legislature and Parliament.
  • This accountability mechanism ensures transparency about challenges or constraints in the auditing process.

Complementary Safeguards

Once the audit report is submitted, Section 126(5) prohibits any alteration to the audit report or the financial statements to which it pertains, safeguarding the integrity of the auditing process.

Conclusion

Section 126(3) highlights the Auditor-General’s crucial role in promoting financial accountability and governance in municipalities and municipal entities. By setting clear expectations for auditing and reporting, it ensures timely oversight while maintaining the credibility and independence of the audit process.

The CAN Team