Au­dit out­come shows higher grades

SA’s main de­liv­ery sec­tors are lag­ging be­hind, warns PFMA re­port

The Star Early Edition - - NEWS -

A QUAR­TER of na­tional and provin­cial de­part­ments and en­ti­ties re­ceived a clean au­dit opin­ion last year, Au­di­tor-Gen­eral Kimi Mak­wetu an­nounced yes­ter­day.

“The au­dit out­comes… show an im­prove­ment, with 119 (25 per­cent) of the 469 au­di­tees at­tain­ing clean au­dit out­comes, com­pared to 22 per­cent in the pre­vi­ous year,” he said, tabling his PFMA 2013/14 re­port on na­tional and provin­cial au­dit out­comes.

The re­port cov­ers the au­dit out­comes of all na­tional and provin­cial de­part­ments and en­ti­ties for the 2013/14 fi­nan­cial year. It in­cludes 165 de­part­ments and 304 pub­lic en­ti­ties, with a to­tal bud­geted ex­pen­di­ture of R1.035 tril­lion.

A fur­ther 51 per­cent of de­part­ments and en­ti­ties re­ceived an “un­qual­i­fied with find­ings” au­dit out­come, while 16 per­cent were qual­i­fied with find­ings, 4 per­cent re­ceived an ad­verse or dis­claimer au­dit, while a fur­ther 4 per­cent did not sub­mit on time.

The re­port warns that while re­port­ing on per­for­mance is im­prov­ing, the main ser­vice de­liv­ery sec­tors are lag­ging be­hind. “In the ed­u­ca­tion, health and pub­lic works sec­tor, only six de­part­ments re­ported their per­for­mance in a use­ful and re­li­able man­ner.”

Fur­ther, while the out­comes in most prov­inces im­proved, en­ti­ties and de­part­ments au­dited in Lim­popo and North West had the poor­est re­sults.

Mak­wetu sin­gled out Gaut­eng and the Western Cape for spe­cial men­tion, say­ing they had “led the charge and per­formed ad­mirably”.

Ac­cord­ing to the re­port, 18 (78 per­cent) of 23 au­di­tees in the Western Cape achieved clean au- dits. In Gaut­eng, 19 (54 per­cent) of 35 au­di­tees re­ceived clean au­dits.

The re­port finds there was an in­crease in unau­tho­rised and ir­reg­u­lar spend­ing by de­part­ments. “Ir­reg­u­lar ex­pen­di­ture of R62.7bn was in­curred by 309 au­di­tees. In to­tal, R29.1bn… was in­curred in pre­vi­ous years, but iden­ti­fied and dis­closed for the first time this year.

“Unau­tho­rised ex­pen­di­ture of ap­prox­i­mately R2.6bn – (com­pared with) R2.3bn in 2012/13 was in­curred by 30 de­part­ments. Lit­tle progress has been made in de­creas­ing the ex­tent thereof in the past three years.”

Other key find­ings in­clude that non-com­pli­ance with key leg­is­la­tion re­mains at a high level.

“The num­ber of au­di­tees with (ad­verse) ma­te­rial com­pli­ance find­ings de­creased only slightly, from 76 per­cent to 72 per­cent.”

The re­port high­lights re­sults within the Ed­u­ca­tion, Health and Pub­lic Works sec­tors, with “only one depart­ment out of 30 in th­ese sec­tors hav­ing no ma­te­rial find­ings on com­pli­ance”.

On the use of con­sul­tants, the re­port finds th­ese ser­vices cost the coun­try R12.1bn last year.

It also high­lights the “root causes” of de­part­ments and en­ti­ties not re­ceiv­ing a clean au­dit. Th­ese in­clude:

The slow re­sponse of ac­count­ing of­fi­cers and se­nior man­agers in ad­dress­ing weak­nesses in in­ter­nal con­trols.

In­sta­bil­ity or va­can­cies in key po­si­tions, par­tic­u­larly at the level of ac­count­ing of­fi­cers and chief fi­nan­cial of­fi­cers.

In­ad­e­quate con­se­quences for trans­gres­sions and poor per­for­mance “that is ap­par­ent from the find­ings we re­port on”.

The re­port finds there was a 16 per­cent vacancy rate in ac­count­ing of­fi­cers po­si­tions, with higher va­can­cies at the provin­cial level.

Mak­wetu said although 25 per­cent of de­part­ments and en­ti­ties achieved clean au­dits, this rep­re­sented only 15 per­cent of spend­ing.


Au­di­tor-Gen­eral Kimi Mak­wetu

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