Auditor General Tsakani Maluleke said on Tuesday that there was an improvement in audit outcomes of state institutions during the sixth administration.
Maluleke said there was demonstrable progress being made and seen in the number of clean audits that increased.
“As the seventh administration begins its tenure, they have a good base from which to build,” she said.
“We have seen over the last five years improvement in audit outcomes right across the system, whether you talk about the departments or entities, even the legislatures,” she said.
Maluleke tabled the consolidated Public Finance Management Act audit outcome report for 2023-24 in Parliament on Tuesday.
She said a total of 144 auditees, translating to 35% of overall state institutions, obtained clean audits, while 65 maintained clean audit status over the last five years.
“There are a number of institutions that have mastered the art of remaining in the clean audit zone.
They mastered the key disciplines that make for good financial management and performance and comply with rule of law. They demonstrate the things in the audit and PFMA are attainable, not just desirable.”
Maluleke said 175 of the institutions (42%) obtained an unqualified audit with findings.
She noted that at least 82 institutions have been stagnant in the unqualified audit with findings for the last five years.
Sixty-seven obtained qualified audits with findings, including provincial departments of health, education, social development and public works.
Four obtained adverse and seven others disclaimer audit opinions.
Eighteen institutions have outstanding audits.
Maluleke said while the outstanding audits have improved, far too many were not submitting year after year. These included SAA and Denel.
Maluleke also named SAPO and NSFAS. She stated that the UIF has for many years not submitted financial statements for auditing on time.
The A-G raised red flags about the RAF, which obtained an adverse opinion, and Compensation Fund, which manages a significant budget, and SITA receiving a disclaimer.
Their audits made findings on compliance with key legislation, noting risk with weakness in procurement and contract management and modernisation and protection of IT systems.
She also said they found that R10.3 billion was incurred in fruitless and wasteful expenditure over the last five years.
A total of R105.57bn was owed in claims against departments and R64.39bn to provincial departments of health.
Maluleke said in the last five years her office had identified 292 material irregularities. “The process led to linking material irregularities to financial loss of R14bn. Out of 14bn, we were able to get accounting officers to get just over R3bn.”
She urged the new administration to push back on the issue of accountability and lack of consequence management.
“We will continue to do our part. The moment we are in requires every one in the ecosystem to be seized so that we change the culture,” she said.
“We have to deal with ineffective management of resources and investment in planning co-ordination and disciplined execution of programmes and projects. We believe key enablers in all these things will be if we do invest decisively and unrelentingly in the professionalisation of our public institutions.”
House chairperson Cedric Frolick said the portfolio committees would incorporate the consolidated reports in their programmes.
Scopa chairperson Songezo Zibi welcomed improved outcomes. “The number that has improved outcomes continues to increase. The number of entities that are not meeting their objectives begins to decrease,” Zibi said. “There are some issues that continue to persist. We still have supply chain management issues,” he said.
Cape Times