- October 7, 2021
- Posted by: Julianne Vissie
- Category: Blog
Would you vote for someone who is potentially bankrupt? Would you vote for someone that is not able to recover the money owed for services rendered? Would you vote for someone who the auditors did not believe managed their finances appropriately?
The answer to these questions is no…so, how can you learn more about your municipality’s finances?
There are four things you need to look at, and they fit together like a puzzle.
Budget – Planned finances.
Financial statements – Actual finances.
Performance information – What was achieved with the finances.
Audit report – Are the finances free of material error and fairly reflect activities for the year.
As the ASB, we provide the “rules” that municipalities use when preparing their financial statements. The budget is a planning, forward-looking document, while the financial statements report the historical transactions for the same period as the budget. What happened in the year, and is it reflected in the financial statements? Compare this information to what a municipality planned to do in its budget and interrogate the differences. The performance information explains what a municipality aimed to achieve with the money it was given, e.g. build X number of houses, fix X number of potholes, etc.
The Auditor-General audits all municipality’s financial statements. Their objective is to review the processes and verify a sample of transactions to assess whether the financial statements are free from material error (not all errors) and are a fair representation of the year’s activities.
Where can you access this information? There are several sources, but these two are a good starting point.
The budgets of individual municipalities are available on their websites.
This has been prepared by the Secretariat of the ASB and not the Board.