Law will empower AG to refer irregularities

THE OFFICE of the auditor- general will soon have powers to refer to relevant law- enforcement authorities any irregularities found during audits, the chairperson of the standing committee on the auditor-general, Vincent Smith, announced this week.

Smith said the Public Audit Amendment Bill was approved by the committee this week and would be sent to the National Assembly before being assented to by the president.

Smith was speaking at a briefing where audit outcomes of municipalities for the 2016-2017 financial year were released by Auditor-General Kimi Makwetu, who painted a picture of regress in good governance and accountability.

Also shown by Makwetu’s report was the failure by municipalities to follow auditorgeneral recommendations to remedy accounting flaws.

This, Smith said, was a sign that there were no consequence management instruments in place.

Of the 257 municipalities audited, 45 regressed and only 16 improved. The total number of municipalities decreased from 278 compared to the pre- vious financial year, as a result of amalgamation processes that saw 37 municipalities closing down and 16 new ones being established.

Makwetu said with a regression in audit outcomes, there was an increase in irregular expenditure and little improvement in accountability.

A close look at the audit report showed that while the majority of Western Cape municipalities received clean audits, a concerning number were failing to keep up to good standards.

The City of Cape Town metro, Eden district municipality and Bitou municipality lost their clean audit status owing to non-compliance with supply chain management regulations, the report revealed.

Also, Bitou municipality failed to prevent irregular expenditure while the metro showed weakness in revenue management and the implementation of consequence management.

As it stands, the auditorgeneral has the power to conduct audits and make recommendations on audit outcomes, but not to refer for further investigation or to recover any losses suffered by the state.

The amendment bill introduces a number of sections to the Public Audit Act 25 of 2004 which, if passed, will afford the auditor-general authority to refer undesirable audit outcomes to an appropriate body for investigation.

The bill will empower the auditor-general to recover any resources lost by charging accounting officers or any individual even after they leave the employ of the state.

Smith said this would prevent officials from moving from one municipality to another, leaving a mess of irregularities behind them.

“As long as you are alive, you must account,” he said.

noloyiso.mtembu@inl.co.za