New audit law to hold accounting officers liable

Wednesday, November 21, 2018

As irregular and fruitless expenditure continues to soar, Auditor-General Kimi Makwetu says the newly accented Public Audit Amendment Act will empower his office to take measures that will see accounting officers being held to account for material irregularities.  

This comes after President Cyril Ramaphosa signed the Public Audit Amendment Bill into law on Tuesday which, once regulations have been finalised, will allow the Auditor-General to refer material audit irregularities for further investigation. The new law will also allow the Auditor-General to issue a debt certificate to the accounting officer with the aim of recovering the irregular expenditure.  

“The signing of [this Bill into law] gives us [power] to make a significant impact on the matters that have accumulated over a number of years, as far as ignoring of financial controls as well as other matters of irregular expenditure are concerned,” Makwetu said.  

According to the AG’s report, about 72% of the audited departments and entities were found not to be in compliance with legislation - which was a regression when compared to the 64% that fared badly in the 2016/17 audit period.  

Briefing journalists at the Imbizo Centre on Wednesday, Makwetu said there were serious weaknesses in the financial management of national and provincial government that had not been addressed over the past four years.  

He said unauthorised expenditure went up by over 200% from the previous year to R2.5 billion, while irregular expenditure remained high at R51 billion.  

Makwetu said the total included irregular expenditure of those audits -- where the Auditor-General had completed audits after the cut-off date of the report -- amounted to R5.4 billion.  

He said it was worth noting that the R51 billion excludes State-owned entities that are not audited by his office, whose total irregular expenditure amounted to R28.4 billion.  

The AG said the new Bill gives them the authority to take action on material irregularities and a chance to get to the bottom of how irregularities really occur.  

Makwetu said if it is found that accounting officers did not act within the ambit of the financial regulations, “the legislation also empowers us to consider issuing a certificate of debt that we will attach to whoever has been identified consequent to the report that surfaced when the investigation of those transactions was done”.  

He said the signing of the amendments into law were timely with the release of his report, as it will help his office move away from complaining every year about a lack of consequence. -