A Guide for Councillors

The Role of Councillors in Municipal Finance Management

Part 2

THESE ARE THE ROLES PLAYED BY INDEPENDENT PEOPLE WHO HAVE THE NECESSARY SKILLS AND EXPERIENCE AND RELEVANT OFFICIALS. COUNCILLORS MAY NOT BE ON THIS COMMITTEE.

Audit committee This is an independent advisory committee. Councillors may not be on this committee and it must comprise at least three persons with relevant skills and experience, but the majority may not be municipal staff. The audit committee is important to help councillors in the oversight function by advising on matters such as accounting practice, risk management, governance and fi nancial accounting and reporting- it has to be independent because it must be in a position to identify and challenge failures in fi nancial governance without fearing negative consequences from council.

THESE ARE THE ROLES PLAYED BY INDEPENDENT PEOPLE WHO HAVE THE NECESSARY SKILLS AND EXPERIENCE. COUNCILLORS OR OFFICIALS MAY NOT BE INVOLVED IN THE EXTERNAL AUDIT OTHER THAN TO ASSIST THE AUDITOR-GENERAL.

External audit by the Auditor-General The Auditor-General reviews the annual fi nancial statements and annual report. The audit by the Auditor- General tells councillors and the public if the fi nancial statements and annual report are a fair re fl ection of the fi nancial state of the municipality. The report is based on a review of the processes and policies that the council has put in place. The Auditor-General ‛ s investigations will reveal the state of the municipality ‛ s fi nances and strength of its fi nancial systems.

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Understanding the Municipal Finance Management Act