‘Plan, do, check and act’ – Auditor-General guides municipalities

In his recent report on audit outcomes for local government, Auditor-General Kimi Makwetu said municipalities would be well geared to serve their communities if they embraced principles of accountability, good governance and strong internal controls.

Kimi Makwetu
Kimi Makwetu heads the office of South Africa’s Auditor-General, one of the eight independent institutions established in terms of Chapter 9 of the Constitution to safeguard democracy. (Image: GCIS)

Mary Alexander

Auditor-General Kimi Makwetu recently released his 2015-16 local government audit outcomes report, which recorded limited improvements in the audit results of South Africa’s municipalities.

In his report, Makwetu highlighted the importance of accountability in the management of municipal affairs. He stressed proper planning, focused on the needs of citizens, as well as good internal control and supervision to ensure proper financial and performance management.

With strong internal controls and good governance, municipalities would be able to live up to the expectations of the communities that they served, he said.

“The accountability that the municipal leadership must take for their actions, decisions and policies (including being answerable to the community) is critical for financial and performance management as well as respect for the law in local government.”

Strong internal controls

Strong internal controls were key to ensuring that municipalities delivered to communities effectively, economically and efficiently, Makwetu said.

These controls would also ensure that municipal leaders produced quality financial statements and performance reports, and complied with legislation – especially in the areas of procurement and contract management.

Makwetu advised municipalities to follow these guidelines to strengthen their internal controls:

  • Leadership creating a culture of honesty, ethical business practices and good governanc
  • Proper record-keeping to ensure that complete, relevant and accurate information was accessible and available to support financial and performance reports.
  • Instilling basic controls to ensure the processing of transactions in an accurate, complete and timely manner.
  • Monitoring of compliance with legislation, rules and regulatio
  • Filling vacancies in critical areas such as municipal managers, chief financial officers, heads of supply chain management and chief information officer
  • In general, always ensuring an appropriate level of financial management capacity in a municipality.
  • Instilling appropriate information technology controls, with emphasis on security management, user access management and business continuity.
  • Following through on audit action pla

“Our country’s Constitution stipulates that local government should provide a democratic and an accountable government for local communities,” Makwetu said.

“We believe that the newly elected mayors and councillors and the administration that supports them are ready to accept their responsibilities and are willing to be held accountable for the performance of the municipalities they now govern.”

The Plan-Do-Check-Act Cycle

Makwetu stressed the importance of municipal leaders using the “plan, do, check and act” cycle to continuously improve the processes, outcomes and services of their municipalities.



Spend sufficient time and consult widely to clearly define the targets that should be achieved by the municipality in terms of audit outcomes, service delivery (including project delivery and infrastructure maintenance) and financial health.

Municipalities should consult audit action plans, the new integrated development plan, service delivery and budget implementation plans, annual budgets, and maintenance and project plans.

These targets should be specific, measurable, achievable, relevant and time bound. Responsibilities for achieving the targets should be allocated and sufficient time and resources should be provided to ensure that performance is managed through robust internal control and strong financial management.

2. DO

Good internal control is the key to ensuring that municipalities deliver on their priorities in an effective, efficient and economical manner.

Municipal managers, senior managers and municipal officials should embrace the responsibility to implement and maintain effective and efficient systems of internal control.

Because of this, the key positions of municipal manager, CFO and head of the SCM unit should be filled with properly skilled and qualified people. When these positions are stable, audit outcomes tend to be good.

Municipalities with poor audit outcomes can strengthen their financial and performance management through effective leadership, audit action plans, proper record keeping, daily and monthly disciplines, and reviewing and monitoring compliance.


A key element of internal control is monitoring by the different assurance providers to ensure internal controls are adhered to, risks managed and outcomes achieved.

“We urge the new administration to ensure that all the assurance providers understand their roles, are equipped to perform their functions and are given the authority their role requires, and that the outcome of their monitoring and oversight is appropriately responded to,” the Auditor-General said.

4. ACT

Accountability means that those performing actions or making decisions are answerable for them.

It also means there should be consequences for transgressions, lack of action and poor performance. Municipalities should implement consequence management for officials who fail to comply with applicable legislation, while appropriate and timely action must be taken against transgressors.

All parties, including those charged with governance and oversight, should be prepared to act. This will result in accountability being enforced and consequences instituted against those who intentionally fail to comply with legislation.

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