ANOTHER IMPROVE AUDIT OPINION FOR ROAD AGENCY
The state of Roads Agency Limpopo’s financial books continues to improve, resulting in an unqualified audit opinion in the latest audit by the Auditor-General.
The Board and the Executive Management of RAL sees the findings of the country’s audit institution as a vindication of RAL’s relentless efforts to put its finances on a sound footing over the past few months.
The latest audit opinion by the Auditor-General—which is an unqualified audit opinion with findings—is an improvement from the qualified opinion RAL got in the preceding financial year. Even though there is still a room for improvement, the agency is clearly out of the doldrums and the era when its audit findings alternated between an adverse opinion and a disclaimer—with the disclaimer being the worst opinion the auditor can express about the state of a public institution’s finance books—is firmly in the past.
RAL CEO Maselaganye Matji says the journey towards the goal of a clean audit outcome, which is already within RAL’s view of the horizon, has been anything but plain sailing.
“Turning around any organisation requires an insurmountable amount of resilience, commitment, focus and patience. Implementing strategies to turn around RAL from an adverse audit opinion in the 2014/15 financial year to an unqualified audit opinion in 2016/17, which is a period of two years, has been a fascinating, yet challenging task,” he recalls.
Mr Matji attributes the improvements to the Board’s commitment to its oversight role, stability in the agency’s executive management, and the way the two structures have been unwavering in rolling out the company’s Turnaround Strategy.
Through its Turnaround Strategy adopted in 2014, the Agency has managed to put in place internal control measures to root out corruption and eradicate irregular expenditure, strengthened its executive management by employing highly qualified and experienced experts, strengthened internal supply chain management to ensure compliance, and terminated illegally appointed contractors and engineers.
The culture of compliance these interventions have ingrained is clearly irreversible, and the Agency is firmly on course to eliminate few outstanding issues of concern in order to achieve an unqualified audit opinion without findings (which is often referred to as a “clean audit” in popular parlance) next year.
The Auditor-General highlighted the fact he was unable to find audit evidence for the amount the agency spent employing labour and for the creation of 1747 full-time jobs.
The audit institution would like to see RAL doing more to prevent irregular expenditure in line with the requirements of the Public Finance Management Act, and to beef up the systems meant to safeguard and maintain its assets.
“The entity developed a plan to address internal and external audit findings, but the appropriate level of management did not monitor adherence to the plan in a timely manner,” says the Auditor-General. “Noncompliance with legislation could have been prevented had compliance been properly reviewed and monitored. Effective performance procedures had not been adequately developed and implemented because of the slow response to previous year audit findings.” Moves are already afoot to address the issues flagged by the audit institution to ensure compliance going forward.
The leadership of RAL has vowed to spare neither strength nor energy to ensure the Agency’s bold plans to attain a clean audit, as illustrated by its yearly progressive audit improvements, is realized.
Mr Matji explains some of the initiatives underway to ensure RAL achieves a clean audit:
“We have also strengthened our internal fraud detection processes. We have declared war against fruitless and wasteful expenditure, and irregular spending behaviour. We have also exercised fiscal prudence by outlawing all forms of unbudgeted spending.
“The strict budget control culture we have introduced is paying dividends. As part of the Agency’s fiscal prudence initiative, we have effectively dragged the agency into austerity mode. We also complied with every aspect of the Treasury’s procurement directives. We insisted that contractors should only be contracted if there is proof that their services are rendered on a value-for-money basis. We have successfully cleansed our supplier database of all contractors
who have a history of shortchanging the agency,” he says.
UPBEAT: Public Works, Roads and Infrastructure MEC Ms Nandi Ndalane (middle) flanked by RAL Board Chairperson Mr Matome Ralebipi (left) and CEO Mr Maselaganye Matji (right)
POSITIVE: Public Works, Roads and Infrastructure MEC Ms Nandi Ndalane (left) and CEO Mr Maselaganye Matji (right) all believe there’s room for improvement