Cape Town – Auditor General Kimi Makwetu says the move for national and provincial departments towards obtaining clean audits has remained static over a three-year period.
The Auditor-General said this when he briefed the Standing Committee on Public Accounts on the audit outcomes of national and provincial departments in the Old Assembly on Wednesday.
The Auditor General’s briefing is a precursor to the release of his consolidated report later this month.
“It is clear that there is a fairly static movement, if one looks at the departments overall. One notable fact is that in terms of the unqualified with no findings [audits], the percentage is starting to decline from where it was the previous year, comparing 2014 to 2015,” Makwetu said.
In his presentation, the Auditor General said while departments are slow to improve, with a slight regression from the 2014/15 financial year, public entity outcomes are improving.
Out of the 169 departments that were audited in the year under review (2015/16), 44, or 26%, obtained clean audits, which is a regression compared to the previous year.
During the 2014/15 financial year, of the 166 departments that were audited, 48, or 29%, received clean audits.
In another category, 53% of the departments received an unqualified audit opinion with findings for both the 2014/15 and 2015/16 financial years, meaning there was no change.
About 17% received qualified audit opinions for both years.
The Auditor General said public entities, on the other hand, have recorded an improvement in their audit outcomes.
“…The extent of the entities that have been unqualified with findings, as well as the qualified ones, seem to be stuck at the same levels.
“It is almost like the changing of the decks, there are those that improved and there are those that have regressed. But if you look at the overall performance, there is no real shift in essence when one looks at the departments.
“The entities seem to have made significant strides in strengthening their control environment, as shown by the growing number of clean audits, as far as department entities are concerned. So there is certainly improvement in that area,” Makwetu said.
Out of the 315 entities that were audited during the 2015/16 financial year, 108, or 34%, received clean audits.
This was an improvement compared the 2014/15 audit outcomes, where 29% of 311 audited entities obtained clean audits.
The number of entities that received an unqualified audit opinion with findings regressed from 45% in 2014/15 to 38% in 2015/16.
Less entities (12%) were given qualified audit opinions in the period under review, compared to 16% in the previous year.
Few provincial departments demonstrating an improvement
The Auditor General said, meanwhile, that there were a few provinces overall that have effected improvement in the period under review.
“Gauteng, Northern Cape, KwaZulu-Natal and the Eastern Cape… have shown overall, in terms of their departments, as some of the provinces that have contributed good audit outcomes
“The area where there were regressions were largely in the Western Cape, although it still has quite a dominant number of entities and departments that achieved clean audits,” he said.
Limpopo, North West and the Free State, however, were among those that have lagged behind, with the Auditor General identifying challenges like internal controls as those contributing to their unfavourable outcomes.
Twenty-one provincial departments received clean audits in 2015/16 compared to 19 clean audits in the previous year.
KwaZulu-Natal improved to 12 clean audits from 10 audits from the previous financial year, while the Northern Cape saw clean audits going up from three to six in the same period.
The Eastern Cape leaped from four clean audits to eight between the previous and the current audit cycles.
Meanwhile, the Auditor General, commended leadership in the departments that have made a turnaround for remaining committed to improving audit outcomes. – SAnews.gov.za
