Auditor-general to monitor relief funds
Auditor-general Kimi Makwetu is spearheading a proactive strategy by his office to monitor the expenditure by the government and its entities of funds from the R500bn stimulus package in a bid to minimise the possibility of fraud and corruption.
Auditor-general Kimi Makwetu is spearheading a proactive strategy by his office to monitor the expenditure by the state and its entities of funds from the R500bn stimulus package in a bid to minimise the possibility of fraud and corruption.
An amount of R200bn of the R500bn package announced by President Cyril Ramaphosa relates to the credit guarantee loan scheme through which the government will support financial institutions in granting loans to small and medium businesses in distress and which will not involve direct financial transactions by government entities. Another R70bn relates to tax relief that will be evaluated by the auditor-general during an audit of the SA Revenue Service.
Makwetu has assured Ramaphosa that his office has the necessary tools to undertake this additional audit work. The office has almost completed its plans and is ready to spring into action, Makwetu told parliament’s standing committee on the auditor-general on Friday.
“The outbreak of the global Covid-19 pandemic has demanded an extraordinary response by governments around the world. The same applies to national audit offices,” he said. “Experience internationally and locally shows that these types of circumstance create opportunities for integrity violations, most notably fraud and corruption, which could seriously weaken the effectiveness of government actions.”
The government has announced that procurement regulations would be relaxed to facilitate emergency procurement, such as of personal protective equipment, and Makwetu said that this raised the risks of wrongdoing.
Among the measures announced under the R500bn programme are relief by the Unemployment Insurance Fund (UIF) for the unemployed and for those whose income is reduced during the lockdown. There are also social relief measures and R20bn for services supplied by municipalities.
Most of the risk of fraud and corruption lay at municipal level, Makwetu said, adding that these funds would only be disbursed at a later stage.
He explained that the focus of the audit teams would be on the SA Social Security Agency (Sassa), UIF and health departments. From next week audit teams would begin delving into the information systems of the UIF and Sassa to ensure money was being distributed correctly.
Makwetu said the additional work would probably not involve more than 100 of the 3,500 employees of the auditorgeneral’s office. “All of this is within our capacity,” he reassured MPs.
Preventive controls would be introduced and strengthened to limit the possibility of fraud and corruption taking place rather than only identifying it long after it had happened. Where it is picked up by auditors, departments would be warned to prevent it happening again. They would also be informed about control weaknesses so they could be fixed before additional payments or distributions were made.
Multidisciplinary teams comprising forensic and performance auditors as well as information technology specialists and fraud experts will undertake this work.
Makwetu said in drawing up the plans, lessons had been drawn from the approaches adopted by Sierra Leone during the Ebola crisis, Indonesia in response to the tsunami, and
Japan in response to the nuclear disaster, as well as from international standards that have been developed for auditing during a disaster.
He said special reports would be tabled in parliament on the audits conducted. Because of the pandemic, government departments have been given a twomonth extension to submit their financial statements, from endMay to end-July.
Makwetu said this would mean the audited financial statements would only be signed off by the end of September instead of the normal end of July.