Cape Town – Auditor General Kimi Makwetu says his office has noted an improvement in compliance with key legislation among departments and entities that were audited over the past financial year.
He said this when he released the audit findings of the 2015/16 financial year in Cape Town on Wednesday.
“There has been an improvement in compliance with key legislation as the number of auditees with no material findings on compliance has increased from 27% to 33% since 2013/14.
“The non-compliance rate, however, is too high and needs significant attention,” he said.
Makwetu said the areas where improvement was recorded in the period under review includes areas of procurement and contract management – also referred to as supply chain management – for public entities.
“It is worth noting that this is an encouraging trend that needs to be encouraged to continue,” he said.
Better quality of annual reports
On the quality of annual performance reports, the Auditor General has seen an increasing trend. 65% of departments, compared to 61% from three years ago, are producing annual reports that are reliable and credible.
Outstanding audits
The Auditor General said, meanwhile, that 27 audits were not completed in time to be fully included in the consolidated report.
He said 18 out of the 27 audits were still in progress at the date of the report.
“The main reason for this was non-submission or late submission of financial statements and information.
“However, there were audits that were delayed as a result of disagreements on accounting matters,” he said in the report.
Irregular, fruitless and wasteful and unauthorised expenditure
The Auditor General said, meanwhile, that irregular expenditure has increased by nearly 40% since 2013/14 to R46.36 billion.
“If you look at the main reason for the increase in irregular expenditure, it continues to be non-compliance with supply chain management.
“So if a department does not comply with supply chain legislation, even if they have made a great effort to source the goods and services, they still remain non-compliant and that non-compliance triggers irregular expenditure,” he said.
He said the controls that should be put in place in the procurement process are from the constitutional requirements of supply chain management, as set out in section 201 of the Constitution.
Makwetu said fruitless and wasteful expenditure in the 2015/16 financial year was 14% higher than in 2013/14 – at R1.37 billion.
He said the increase was incurred due to an increasing number of auditees.
Six auditees were responsible for just over 70% of this expenditure, with the Passenger Rail Agency of South Africa and the Department of Water and Sanitation being part of the list.
Unauthorised expenditure has decreased by just over 50% since 2013/14 to R925 million as a result of interventions at national and provincial levels.
The main reason for the unauthorised expenditure remained overspending of the budget. – SAnews.gov.za
