Request to Simplify Financial Reporting

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October 21, 2020
Excerpts from 30 Oct Council Meeting
November 16, 2020

Request to Simplify Financial Reporting

15 November 2020

Minister David Maynier

Ministry of Finance and Economic Opportunities

Western Cape Government

 

Dear Minister Maynier,

May we ask you to consider an initiative to simplify municipal financial reporting?

As you know, municipalities are failing at managing their finances.  There is a shortage of qualified CFOs, and to hire financial consultants to do the work for a municipality is very expensive.

The Plettenberg Bay Ratepayers Association has worked with four experienced certified accountants to try to understand and analyze Bitou’s financial reports, and not one has been able to ascertain our solvency, sustainability, and the extent of our problem areas.

If a certified accountant cannot figure out municipal financial reporting, how can we expect our councillors to provide oversight and make intelligent decisions?  Financial oversight is a major responsibility of councillors and it is quite evident that less than 1% of them understand what is going on.  Under these circumstances no one should be surprised at the financial mess in which municipalities find themselves and the ease with which municipal funds are stolen and misspent.

We would like to suggest you introduce legislation to simplify municipal reporting and to make it more understandable and transparent.  Financial legislation is currently not there to reveal, it is there to conceal.

In addition, we suggest you offer an online course for councillors to assist them in reading financial reports.  How many of them do you think can read and understand a simple balance sheet…let alone a municipal financial report?  Perhaps councillors could be given a year to complete the course, and if after a year they still cannot fulfill the most important part of their responsibility, the political parties should be encouraged to replace them.

We hope you will do what you can to improve financial governance in our towns.

Kind regards,

Peter Gaylard

Chairman

cc:  Premier Winde

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