Treasury has its say on Public Audit Act changes
The process of amending the Public Audit Act to give the office of the auditor-general more teeth is under way in Parliament, with the Treasury the latest department to make inputs.
Inputs have largely focused on how to compel underperforming auditees to get in line with government procurement standards.
But a delegation from the Treasury told MPs that in some cases, the subjects of audits were in such financial distress that they could not even pay for the service.
One of the aims of the process being handled by Parliament’s standing committee on the auditor-general is the introduction of penalties for state-owned entities and government departments that repeatedly flout Treasury guidelines and regulations on supply chain management.
Auditor-General Kimi Makwetu said in November that irregular expenditure had ballooned to R45.6bn, representing a 55% rise.
At the same time, more departments and entities were resisting the authority of Makwetu’s office and had intimidated his staff in an effort to change adverse audit outcomes.
Although the auditor-general is empowered to perform audits on all of government in terms of the Public Audit Act, the office is constrained when it comes to enforcing compliance.
The Treasury’s delegation said the amendment had to allow room for the auditorgeneral to negotiate with auditees on audit fees, as some might not be able to afford the fees.
“We would propose that section 23 (6) 2 should state that audit fees ... [be negotiated].
“We want that agreed to up front and they [the auditorgeneral and auditees] reach an agreement where they all know what they budgeted for,” the delegation said.
At present, the act stipulates that an auditee must settle its account for audit fees within 30 days from the date of invoice. If this does not happen, the auditor-general must promptly take legal steps to recover the amount, unless it is not practical to do so.
Committee chairman Vincent Smith said this was a vital part of the amendments and needed the auditor-general’s agreement. Makwetu said he had seen the Treasury’s input, but had still to respond to it.