ANÁLISIS DEL MACRO Y MICRO AMBIENTE
ESTADO DE PÉRDIDAS Y GANANCIAS
16.8.1. Tabling of the annual report and of the annual financial statements
Annual reports must be tabled in council by November/December. The CEO of a municipal entity must provide the parent municipality with the entity’s annual report at least one month earlier than the above-mentioned tabling. Immediately after the annual report is tabled in the council, the accounting officers must make the report public, and invite community comments or representation on the report.
16.8.2. Submission of the annual report and of the annual financial statements Annual financial statements must be submitted to the AGSA by 31 August, or by 30 September, in the case of those municipalities where consolidated annual financial
statements are required, due to the existence of a municipal entity. In the latter instance, the municipal entity must provide the parent municipality with statements by 31 August. With the introduction of the new format, and with the requirements that are outlined in Circular No. 63, the submission of the annual financial statements to the municipality and to AGSA by the municipal entity must be accompanied by the draft annual report. The municipality’s financial statements submitted to the AGSA must also be submitted with a draft annual report, and the consolidated financial statements must be accompanied by a consolidated unaudited annual report by September. These financial statements should have been
reviewed by the audit committee two weeks before their submission to AGSA, as determined by the National Treasury MFMA Circular No. 65.
157 16.8.3. Audit of the predetermined objectives
AGSA must return a report to the municipal manager, or to the CEO, within three months of receiving the statements for audit, meaning by 30 November, or by 31 December, as the case may be. AGSA will also audit every municipality’s measurement of their performance every year, and include the report in the municipality’s annual report.
16.8.4. Oversight reports
MFMA Circular No. 62 contributes to the oversight process recorded in legislation. Whereas the MFMA allows for the annual report to be tabled by 31 December at the latest, there is a process of evaluating the draft annual report to ensure that what is finally published is in line with the actual performance, and that it has been reviewed by the political oversight
committees. Thus, the draft unaudited annual report must have been reviewed by the municipal manager at the end of July, and it must also have been submitted to the audit committee, in order that it might be tabled in council by the end of August. The unaudited annual report, excluding the auditor’s report, is supported by the council to be used for the IDP review process. It is sent to the MPAC for the necessary review to take place. The MPAC should review the annual reports that are tabled in council in accordance with MFMA Circular No. 32, which is available on the National Treasury website at
http://mfma.treasury.gov.za/MFMA/Circulars.
The above-mentioned Circular states the following about the oversight report, which is the final major step that is taken in the annual reporting process of a municipality. Section 129 of the MFMA requires the council to consider the annual reports of its municipality and
municipal entities, and to adopt an oversight report, containing the council’s comments on each annual report.
The oversight report must state whether the council has:
approved the annual report, with or without reservations; rejected the annual report; or
referred the annual report back for revision of those components that require revision.
The oversight report is, thus, clearly distinguished from the annual report. The latter report is submitted to the council by the accounting officer and by the mayor. It forms part of the process that is followed for discharging accountability by the executive and the
administration, in terms of their performance in achieving the goals set by the council. The oversight report, in contrast, is a report of the municipal council and follows the
consideration of, and the consultation on, the annual report that is undertaken by the council itself. Thus, the full accountability cycle is completed, and the separation of powers is preserved, so as to promote effective governance and accountability.
The oversight committee must conclude its oversight report within 7 days of the AGSA’s report having been received. The council must then adopt an oversight report containing its comments on the annual report, including whether it approves or rejects the report, or whether it wishes it to be referred back for further revision.
158 16.8.5. Meetings to discuss the annual report
A council meeting that is open to the public must be convened to discuss the annual report, at which time the council addresses the related issues raised. The provincial MEC for Local Government must assess the statements raised, so as to ensure that the council has addressed the appropriate issues, and to see that it has responded accordingly. Any
omissions by the municipality must then be reported to the provincial legislature for further action.
The municipal manager must attend the above-mentioned meetings and make the oversight report and the minutes of the meeting available to AGSA, and to the national and provincial government.