Improvements don’t filter down to local authorities
GAUTENG and the Western Cape are leading the provincial pack with overall improved audits, but across provinces, even where there are improvements, these do not seem to trickle down to municipalities.
“Let’s not look at the provinces in isolation with the big challenges at municipalities,” Auditor-General Kimi Makwetu said yesterday when releasing the latest provincial and national audit outcomes.
“Why are they (provinces) not paying attention to municipalities?”
Here’s how provinces fared:
Eighteen of the 23 auditees, or 78 percent, attained clean audits, up from 48 percent the previous year, as the Western Cape Nature Conservation Board jumped from a qualified audit to a clean one.
Irregular expenditure was reduced to R170 million, down from R221m, but 90 percent of this related to non-compliance with supply-chain management legislation, including procurement without competitive bidding, quotations and contract management.
As clean audits increased to 19, from eight, the quality of financial statements also improved. The departments of Health and Human Settlements again received qualified audit opinions. G-fleet (the provincial car pool) regressed to an adverse finding.
While unauthorised, fruitless and wasteful expenditure was cut to R228m from R1.6bn over the past three years, there was also a drop in noncompliance with regulations.
Of the 16 departments and 22 public entities audited, only seven clean audits were sustained, while two new auditees joined that rank.
Twenty-one auditees remained stagnant, including the departments of Health and Education, which again received qualified audits.
Irregular expenditure increased to R4.33bn – up from R3.59bn – with the departments of Eduction, Health, and Arts and Culture responsible for 93 percent of this irregular expenditure.
There was no proof that goods and/or services worth R11m were ever received.
There was little movement in addressing non-compliance with supply-chain management prescripts as root causes for no improvement.
For the first time in 20 years, the overall audit outcome has improved, led by the Premier’s Office, Treasury, and Local Government and Traditional Affairs departments, which scored clean bills of health. Irregular expenditure related to procurement increased to R2.6bn, of which 73 percent was incurred by the Roads and Public Works Department.
As the Education Department and the Premier’s Office regressed to a qualified audit, the legislature reclaimed its clean audit, which was also awarded to the Sports Department and the fleet management trading entity. Only six of the 21 departments and public entities provided financial statements that did not require material adjustments.
Of the R2.429bn irregular expenditure, 92 percent was incurred by the Health, Education and Human Settlements departments.
Co-operative Governance, Human Settlements and Traditional Affairs got clean audits, while Economic Development, Environment and Tourism, and the Gateway Airports Authority regressed to adverse audits. Health, Public Works and the Limpopo Tourism Agency improved to unqualified audit with findings.
Only three of the 23 auditees submitted financial statements that did not require material changes as irregular expenditure increased to R3.5bn – up from R2bn – on the back of the departments of Education and Health and the Limpopo Roads Agency.
There were no improvements. Of the biggest spenders, only Education produced a reliable performance report. Health, Public Works, and Roads and Transport did not address audit concerns.
Irregular spending increased to just over R1bn, nearly fivefold from the previous year of R234m, with 95 percent of this irregular spending arising from noncompliance with supply-chain management legislation. Public Works and Roads and Transport were the main culprits.
Five of the 19 auditees received clean audits and nine received unqualified audits with findings. Concerns were raised as the two largest departments – Education and Health, were stagnant, with qualified audits. Irregular expenditure is up slightly to R1.743bn.
Only two departments received qualified audit opinions and 10 were qualified with findings. The Treasury leads the pack with a clean audit. Health, Education and Public Works had material findings. Irregular spending decreased to R1.193bn. Spending of some R506m could not be verified.