It was not a "clean report"

Japie Bosch

Kouga municipality had nothing to brag about earlier this year when it celebrated a “clean report” from the office of the auditor-general.

There is no such thing as a “clean” report”, says Mr Christo van Dyk, senior manager of the office of the auditor-general in Port Elizabeth. It was an “unqualified report”.

• An unqualified report of the auditor-general means that the financial statements (of a municipality) are a fair reflection of transactions done in a particular year – disclosing authorized and unauthorized expenditure, Mr Van Dyk explained.

He was speaking at a public meeting of the municipality in Humansdorp on Thursday, 29 July 2010. The meeting was held to discuss the annual report of the Kouga municipality for 2008/2009.

This is in stark contrast to reports by Kouga councilors and the local press report a few weeks ago that the municipality received a “clean” report from the auditor-general.

Mr Van Dyk made the following clear: “An unqualified report does not mean a clean report. There is no such thing as a clean report. A clean report is a blank piece of paper.”

Mr Van Dyk explained how his team works. When investigating the finances of an organisation like a municipality the audit team scrutinises the financial statements and other documentation of that municipality on a sample basis. In the process they would advise the municipal officials responsible for those financial statements to amend them to reflect what happened to all the monies of the municipality.

Once that is done and the office of the auditor-general is satisfied that the statements are a fair reflection of where the monies went to it will declare the financial statements “unqualified”. It will include sections such as:

• unauthorized,
• irregular and 
• fruitless and wasteful expenditure.

(Read a previous report "Shocking negligence and a waste of money" by clicking HERE.)

The municipality, thus, cannot claim or imply that all income was well spent. The auditor-general’s report clearly commented on numerous issues where things went wrong, involving millions of rands. The financial statements also reflects it.

A qualified report means that the auditors were not satisfied with what the financial statements reflect.

• One may, however, compliment the finance officials of Kouga that they co-operated with the office of auditor-general in order to submit a set of financial statements that complied to the standards laid down.