‘Bean counters’ accountable
AUDITOR-GENERAL: NEW POWERS CAN MAKE ACCOUNTANTS CULPABLE
Irregular expenditure: they must ensure there are checks and balances.
Under the new powers granted to the auditor-general of South Africa (AG), any accounting officer’s name will be on the dotted line should it come to pass a certificate of debt is issued, officials warned yesterday.
This makes the person personally liable for the financial fallout of a material irregularity, even if they move to another body, be it in the public or private sector.
To this end, SA’s Directorate for Priority Crime Investigation (the Hawks), Asset Forfeiture Unit and the National Prosecuting Authority would be used.
According to a National Treasury definition in its Guide for Accounting Officers Public Finance Management Act, the accounting officer is the “head of a department or the chief executive officer of a constitutional institution”.
“The Treasury recognises the demands the Act places on accounting officers and also that complete implementation of the Act will take several years. However, significant improvements can and must be achieved over the next 12 months,” Treasury wrote in 2000.
A little more than 18 years later, there has been irregular expenditure of more than R60 billion for 2018-19, and material irregularities to the value of more than R2.81
If they take charge of government funds, they need to be accountable.
billion – R2.51 billion of which came from Prasa’s locomotives.
AG defined the new category of material irregularity as “contravention of legislation, fraud, theft or a breach of a fiduciary duty, identified during an audit performed under the Public Audit Act, that resulted in or is likely to result in a material financial loss, the misuse or loss of a material public resource or substantial harm to a public sector institution or the general public”.
Acting national head of audits Alice Muller said the “responsibility rests with accounting officers and accounting authorities to ensure there are controls, checks and balances.
“If they take charge of government funds, they need to be accountable as to how those funds are spent.”
And when a problem is identified, and the accounting officer failed to fix it following repeated interventions and assistance from the auditor-general, the AG could then issue the certificate of debt to recover the money.
The weak points in the plan are if the accounting officer resigns immediately upon notification of the material irregularity, and legal action against said certificates of debt.
To the first point, AG’s head of legal, Marissa Bezuidenhout, said there was an option for strict liability which made the incoming person liable for the former accounting officer’s actions.
“The accounting officer has to act against the person who caused the material irregularity, and collect the money from the third party,” Bezuidenhout said.
“Then he would be taking appropriate action and we would be happy with that.” To the latter point, Muller said the AG had beefed up its legal department.
Alice Muller
Acting national head of audits