Johannesburg – The Municipal Finance Management Act (MFMA) requires all municipalities in South Africa to prepare and submit their annual financial statements for auditing within two months after the financial year-end.
The Annual Report and Financial Statements referred to in subsection (1) (a) must fairly present the state of affairs of the municipality, its business, its financial results, its performance against prescribed financial management performance indicators, and its financial position as at the end of the financial year in question.
“Munsoft is committed to helping municipalities obtain clean and favourable audit outcomes. Our goal is to assist municipalities to be fully compliant and transparent in the way funds are being allocated and spent,” says Munsoft Chief Operating Officer, Stephan du Toit.
Munsoft provides training and guidance to municipalities to help them better understand the financial year-end process, including information on financial reporting requirements, deadlines, and best practices.
“This often includes reconciliations of the major components of the annual financial statements which include debtors (exchange and non-exchange), creditors, cashbook and inventory to the general ledger.”
As the home-grown leader in the development, deployment, and maintenance of municipal financial management software, Munsoft can identify gaps within municipal operations and customise solutions that are suited for each municipality.
Du Toit explains that part of the process is the completeness of the sections of the source document such as invoices, and bank statements.
Munsoft often advises on the alignment of correct tariffs to appropriate accounts as well as adequate budgeting which will assist in curbing unauthorised expenditure of the municipality.
“At an overall level, we ensure that the municipality adheres to the Auditor General Audit process which leads to a favourable or an improved audit outcome,” he says.
Contributing to the improvement of financial year-end preparation
As part of the process, Munsoft encourages regular check-ins with the municipalities to ensure that they are on track with the year-end reporting and to provide any necessary support or guidance.
The organisation has structured workshops where it engages with the municipalities on important aspects to cover prior to the workshops, they provide onsite support for year-end closures and address training needs through manuals.
“Munsoft ensures that municipalities run more efficiently and accurately by assisting them to provide accurate financial information for reporting to key stakeholders, which, in turn, will yield better service delivery,” explains Du Toit.
“By implementing financial management systems that offer real-time insights and analytics, we can help municipalities better manage their finances and stay on top of year-end reporting requirements.”
Looking into the future
Munsoft’s financial systems are designed to incorporate solutions that offer an accessible and convenient service to accurately manage and monitor gaps within municipalities.
The system is able to identify assets in need of restoration or maintenance, as well as send real-time data and reports to the relevant stakeholders.
“Our focus is to support our clients by ensuring that at least 80 % of them close the system by the 15th of July 2023 and to ensure that from a system perspective, there are no hindrances,” says Omphile Sehunelo, System Support Manager at Munsoft.
The municipalities are required to submit the Annual Financial Statements by the 31st of August 2023 and the Auditor General is given three months to audit and furnish audit reports by 30 November 2023, if the municipality submitted according to the legislated deadline.
Munsoft looks forward to providing insights and statistics on how the process went for this financial year once all results are audited and complete.
