Question mark over audit body

NDLAMBE municipality is going through the motions and saying the right things about transparency and good governance, but its handling of audit committee appointments appears to be the exact opposite.

This week the municipality placed an advertisement in TotT’s sister newspaper The Herald, calling for applications to serve on the municipality’s audit committee.

That is well and good, but the closing date for applications from “suitably qualified” people is this Friday, just three days after the advert appeared.

Each municipality is required by law – the Municipal Finance Management Act (MFMA) – to appoint an audit committee, which is meant to be an independent advisory body dealing with a broad range of financial affairs in the municipality, from reviewing the annual financial statements to advising council on accounting policies, performance management and any other issues referred to it by the municipality.

Because it is a legislative requirement, Ndlambe’s chest-thumping in its advert about wishing to enhance the transparency of its administration and instil public confidence in its financial stewardship is a little grandiose.

The audit committee fulfils a vital public accountability role in the municipality and needs the expertise of suitably qualified people with experience in all the things Ndlambe lists as factors which will influence appointment, such as financial management, internal auditing and knowledge of legislation impacting on local government.

According to the MFMA, the majority of the committee must not be in the employ of the municipality, which makes sense if the committee is to retain its independence.

One would expect that committee members would receive some kind of stipend to reward them for the time and effort they put into a complex responsibility.

The municipal notice merely states committee members will be remunerated at rates commensurate with their professional standing.

However, a concern has been raised over the inclusion of a statement in the advert that the municipality is an equal opportunity and affirmative action employer and the provisions of the Employment Equity Act would be complied with.

As a former employee of the municipality pointed out to TotT, this creates the impression that successful candidates will be “employed” by the municipality, which is contrary to the MFMA, and comprises the independence of the committee.

Derek Victor, chairman of the Ndlambe Action Group, went further to say the Employment Equity Act should in fact have no bearing on appointments to the audit committee, as the prime concern was to find people with the right competencies, rather than complying with enforced employment practices.

The response from the municipality is that the advert was placed late because they received quotations late – no apologies or commitment given to extend the process and make it more transparent.

And Ndlambe is sticking to its guns about the relevance of including the bit about employment equity.

We will watch how this situation unfolds.

– Jon Houzet

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