Audit Outcomes
Cash Flow Distress Flags
Entities showing severe cash-flow distress in audited statements, ranked by months of cash coverage remaining.
Why months of cash coverage is the bluntest distress signal
An entity can report a surplus and still collapse if it runs out of cash to pay salaries and creditors, which is why months of cash coverage is one of the most direct indicators of financial distress in audited statements. Under the MFMA and PFMA, accounting officers must manage liquidity, and severe distress is a precursor to service-delivery failure. AuditPro Core ranks entities by remaining cash coverage so oversight bodies can identify which are closest to the edge before the crisis becomes public.
The Numbers
AuditPro Core renders this view from your tenant's live, tamper-evident records. The figures below are illustrative sample data.
Distressed entities
73
▲ 11
Under one month cover
31
Overdraft reliance
44
Creditors over 90 days
R 38 bn
Entities by months of cash cover
Most cash-distressed entities
| Entity | Cash cover (days) | Overdue creditors |
|---|---|---|
| Emfuleni LM | 4 | R 4.9 bn |
| Maluti-a-Phofung LM | 6 | R 3.1 bn |
| Mangaung Metro | 9 | R 2.4 bn |
| Matjhabeng LM | 11 | R 1.8 bn |
Figures shown are illustrative sample data for demonstration. AuditPro Core renders these views from your own tenant's live, tamper-evident records.
Cash coverage explained
Months of cash coverage estimates how long an entity could meet operating commitments from available cash if revenue stopped. A figure below one month signals acute distress.
Why surplus is not safety
Accrual surpluses include non-cash revenue and uncollected debtors. An entity can be profitable on paper yet unable to pay creditors as they fall due.
Distress as an early warning
Falling cash coverage typically precedes creditor arrears, unauthorised borrowing and service interruptions. Ranking it allows intervention before failure.
How AuditPro Core Bridges the Gap
- Coverage computation: months of cash coverage are derived from audited cash and commitment figures.
- Exception workflow: entities below the coverage threshold raise distress flags for escalation.
- Continuous monitoring: coverage is tracked across periods to show deteriorating trajectories.
- Audit-ready export: the ranked distress list exports for treasury and oversight attention.
Key Takeaways
- Cash coverage measures survival time better than any surplus figure.
- Accrual surpluses can mask an inability to pay creditors on time.
- Falling coverage precedes arrears, borrowing and service failure.
- Ranking entities by coverage enables intervention before collapse.
See This on Your Own Data
AuditPro Core renders this dashboard from your tenant's live, tamper-evident records — every figure traceable to source.