Audit reports for the past year indicate continued high levels of financial mismanagement and poor compliance with reporting procedures, Auditor General Shauket Fakie told members of Parliament recently.
Compared with seven in the previous financial year, 11 departments received qualifications, meaning their reports were inadequate. Notable qualification issues had to do with the areas of asset management, accounts receivable and revenue.
The Independent Complaints Directorate and six other public entities, including the South African local government association, received disclaimers, that is, documentation was insufficient to judge the department’s financial performance.
Some poorly performing departments have also failed to improve their dismal performance. Correctional services and home affairs, for instance, have received qualified or worse audit reports in the past five years. Only the public service commission and public enterprises departments received clean reports.
Minutes of Fakie’s presentation indicate that reasons for the deterioration include vacancies in senior management, a lack of in-year monitoring, inadequate information technology systems and more stringent auditing criteria.
The Auditor General’s office plans to release the general audit report in two to three weeks, but Fakie outlined its findings in a meeting with the standing committee on public accounts on October 18.
Fakie told the Mail & Guardian that he would only comment on the general audit report findings once they were finalised and tabled in Parliament. But, during the discussion with committee members, he said there was a need for extensive training and skills building to fill the vacant senior positions and that departments should conduct monthly monitoring to overcome insufficient in-year monitoring, which also causes departments to miss deadlines. By the end of August, for instance, when the final audit reports were printed, 20 departments had still not handed in their annual reports.
Fakie said it was problematic that senior personnel within departments were not actively involved in the auditing process. He called on the national treasury to play a bigger role by helping departments to improve their accounting systems. Freeman Nomvalo, national treasury Deputy Director General, said one of the biggest challenges is to get departments to submit to the authority of audit committees.
“Our observation from the report is that government administration does need to be jacked up from a financial point of view,” said Nelson Godi, the committee chair. He noted that none of the departments that received qualified reports in the previous year had improved their position and there was a problem with “serial offenders”.
He also said the committee had queried at what point the minister should take responsibility for not ensuring that his or her department’s record improved. “The accounting officer is the Director General, but there is a need to say whether a department is a serial offender. Surely the political leadership must have some accountability? It cannot continue to be business as usual.”