PRETORIA: Auditor-General (AG) Tsakani Maluleke this afternoon reported “a gradual upward trend” in the national and provincial government audit outcomes and called on the government to instil a culture of accountability in the public sector to improve service delivery to South Africans.
Releasing the 2021-22 general report (GR) and material irregularity report for national and provincial departments and their entities, Maluleke said these spheres of government have been gradually improving their ability to report transparently on their finances over the term of the current administration.
“By 31 August 2022, we had notified accounting officers and authorities of 179 material irregularities (MIs) in the national and provincial spheres of government.
“Most of the MIs identified were caused by non-compliance and suspected fraud which resulted in, or are likely to result in, a material financial loss. We estimate the total financial loss of these MIs to be R12 billion”.
Maluleke said there has been a shift at departments and public entities “from a slow response to our findings and recommendations over the years to an improved responsiveness”. Auditees, she said, are taking action to resolve these MIs by recovering losses, preventing further losses and harm through strengthening internal controls, and effecting consequences for transgressions.
“We have noted that there were no actions taken to address 82% of the matters raised until we issued notifications of material irregularities. “Through the process, financial losses of R636 million were prevented from taking place, R14 million in financial loss was recovered and R509 million in financial loss is in the process of being recovered.
“In addition, 39 MIs resulted in internal control improvements to prevent financial loss from recurring, 36 resulted in the officials responsible for the losses being identified and disciplined or undergoing disciplinary processes, 15 fraud and criminal investigations have been instituted and five supplier contracts have been stopped.
“We are also pleased that accounting officers are taking appropriate action to resolve 74% of material irregularities we raised and 11% are already resolved.
“In 15% of the MIs we had to invoke our powers to enforce accountability. We included recommendations in the audit reports of six auditees for MIs that were not dealt with appropriately. In addition, we issued remedial action at three auditees that did not implement the recommendations that we had included in their audit reports in the previous year.
“For most of the auditees where we had to take these steps, we witnessed renewed commitment to address the MIs. Eight MIs were referred to public bodies for further investigation.
“However, greater impact will be achieved if accounting officers and authorities resolve the material irregularities quicker. We continue to advocate for investment in good preventative controls, as preventing material irregularities is more effective than having to deal with the consequences thereof,” Maluleke said.
“While we are cautiously optimistic about this trend, we have found that service delivery, good performance and financial discipline are not yet evident at those auditees with the greatest impact on the lives of South Africans and on government finances.
“These auditees are the key service delivery portfolios, consisting of health; basic education; public works and infrastructure; transport; water and sanitation; and housing, as well as state-owned enterprises, listed as schedule 2 public entities in the Public Finance Management Act,” Maluleke revealed.
The AG emphasised that she firmly believes service delivery improvement will be enabled “by capable, cooperative, accountable and responsive government institutions delivering on their mandates.
“That is why we themed our latest general report: A culture of accountability will improve service delivery”, Maluleke said.
Maluleke added that her office, through its new culture shift strategy, aspires to set in motion commitment and action from all roleplayers in the accountability ecosystem. This accountability ecosystem is made up of all roleplayers in national and provincial government, as well as Parliament and provincial legislatures, that have a part to play in enabling a culture of performance, accountability, transparency and integrity.
The accountability ecosystem includes the Auditor-General of South Africa (AGSA) as the country’s supreme audit institution, as well as the people of South Africa.
