Review of Municipal Annual Financial Statements (AFS) Support Initiative in selected municipalities of KwaZulu-Natal (KZN)

Mthente Research and Consulting Services was appointed by the KZN Treasury to undertake an evaluation of the review of the Municipal Annual Financial Statement (AFS) support initiative. The principal objective of this study was to determine whether the AFS Reviews provided to delegated municipalities are being implemented as specified and to ascertain if there has been an improvement in the quality of AFS submitted and audits opinions expressed on the AFS submitted and audits opinions expressed on the AFS. The initiative, spearheaded by the KZN Provincial Treasury’s Municipal Accounting and Reporting Sub-Programme, aims to enhance financial governance and accountability within the regional municipalities by providing necessary support and monitoring their financial management practices. This support is crucial, particularly in ensuring compliance with the Generally Recognised Accounting Practice (GRAP) and the Municipal Finance Management Act (MFMA). 

Mthente’s methodology included a desktop review, which involved an extensive review of critical documents provided by the KZN Treasury, the development of a Theory of Change (TOC) for the Municipal AFS Review Support Initiative. This TOC was crafted to accurately reflect the initiative’s intended outcomes, impacts, and the essential assumptions underlying its strategic objectives, followed by a workshop with key stakeholders to confirm and refine the proposed TOC. Semi-structured interviews with 16 key municipal officials were conducted, and the key findings were analysed and presented in a report.