The Department of Justice and Constitutional Development has failed to keep full and proper accounting records since April 1994, while public works could not provide proof of ownership of state properties which incurred operating costs of R169,4-million, the auditor general’s report for the 2001/02 financial year reveals.
Only the departments of housing and communication received a clean bill in the report.
Audit qualifications were made against eight of the 34 departmental votes, frequently for the lack of internal controls over inventory, stocks, equipment and assets, including computers and furniture.
Home affairs was given a qualified audit opinion largely because the previous director general, Billy Masetlha, had not had a proper contract — effectively rendering all departmental spending unauthorised expenditure.
But the state of public works finances was so bad the auditor general could not form an audit opinion. This ”disclaimer of opinion” is the most severe sanction he can issue.
The problems within public works include:
The mismatch of electronic bank account numbers with those on paper documents;
Failure to include interdepartmental transactions worth R76,8-million in the financial records; and
Failure to provide supporting documents.
Statistics South Africa received its disclaimer because payments to census field staff could not be verified and because of invalid expenditure on professional and special services.
An adverse audit opinion, the second-strongest condemnation, was given to the government printers for failing to adhere to financial regulations — stock worth R9,35-million was written off due to inadequate internal controls. It was also given to the Department of Water Affairs and Forestry.
Water affairs had failed to establish separate accounts for related entities such as the water trading and equipment accounts, had not submitted full financial statements and supporting documents, and could not provide evidence for its claim of having R5,2-million in a recoverable revenue account.
According to the report key difficulties in departments remain the lack of internal controls, including misstatements in financial records, and unauthorised expenditure.
Although there was non-compliance with the requirements of the Public Finance Management Act, the mindset of officials was starting to change with the full implementation of these regulations.
Submitting his report to Parliament’s standing committee on public accounts (Scopa) this week, Auditor General Shauket Fakie was quizzed about the accuracy of his work.
Several Scopa members said departments had complained to the committee that they were not given time to submit their financial statements and were not clearly told what was required.
Fakie explained that one of the difficulties was the lack of participation by senior departmental officials in the audit process. Often they sent junior officials to the audit committee meetings who agreed with the auditor general’s findings. Only later would the departments’ directors general discover this and then approach Scopa.
Treasury Director General Maria Ramos came to Fakie’s defence, saying it was problematic to raise these issues in Scopa when they should have been resolved during the audit process.
”I’m worried about the discipline effect when the accounting officers come to complain to Scopa,” she said, adding that too many people hid behind capacity problems to excuse non-delivery.