Saica points to CFOs lack of competencies for municipalities financial woes

6th June 2019

By: African News Agency

  

Font size: - +

The South African Institute of Chartered Accountants (Saica) has pointed to a lack of appropriate competencies by chief financial officers as one of the reasons for continued poor financial management of South African municipalities. 

This as the National Treasury minimum competency levels database from September 2018 shows that Gauteng was the province with the least percentage of CFOs meeting minimum competency at 12%. 

The database shows that out of a total of 257 municipalities with 218 CFOs across the country, only 79 CFOs  were meeting minimum competency, a low level of 36.2%.

The Municipal Finance Management Act (MFMA) and the Public Finance Management Act (PFMA) require that the CFO be responsible for the effective financial management of the institution.

This includes the exercise of sound budgeting and budgetary control practices, the operation of internal controls and the timely production of financial reports.  

Natashia Soopal, Saica project director for public sector, said the Auditor General has over the years identified that one of the root causes for poor audit outcomes in both the PFMA and MFMA audits is key officials lacking appropriate competencies.

Soopal said that the municipal regulations on minimum competency levels address the minimum higher education qualifications, work-related experience and core managerial and occupational competencies that are required by financial and supply chain management officials.

"The municipal regulations on minimum competency levels seek to professionalise the local government sector and to make it a career choice for talented officials and to some extent mitigate some of the root causes of poor financial management and service delivery," Soopal said.

“The regulations state that the CFO of a municipality or municipal entity must generally have skills, experience and capacity to assume and fulfill their responsibilities and exercise the functions and powers assigned to them in terms of the MFMA.”

According to National Treasury's database, the vacancy rate for CFOs at municipalities was 15.2% as at 30 August 2018 and only 36.2% of CFOs appointed at municipalities met the minimum competency level.

This meant that 63.8% of municipalities who had CFOs appointed as at 30 August 2018 were not complying with the MFMA in terms of the competency levels which has a potential negative impact on the effective financial management of municipalities.

Soopal urged councillors to appoint CFOs who meet the minimum competency levels in order to improve the effective financial management of municipalities.

"Municipalities should also follow in the footsteps of Cities of Tshwane and Johannesburg and register as training offices to develop their own caliber of Chartered Accountants, Associate General Accountants and Accounting Technicians,” Soopal said.

Edited by African News Agency

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION