President welcomes AG’s report

Thursday, November 26, 2015

Cape Town – President Jacob Zuma has welcomed Auditor-General Kimi Makwetu’s report on national and provincial governments.

Addressing Members of Parliament, Premiers and MECs at the National Council of Provinces on Thursday, the President said the Auditor-General’s report shows improvements but also areas that require serious attention.

This comes after the Auditor-General released his report on government departments that are administered by the Public Finance Management Act (PFMA) for the financial year ending on 2014/15.  

“We also agree with the Auditor-General that there should be consequences for bad management. 

“Ministers, as executive authorities running the departments, have been spoken to in this regard.

“The matter was discussed extensively in the last Cabinet with a view to finding solutions,” the President said.

Releasing his report, the Auditor-General announced that there was a slight improvement in the audit outcomes for national and provincial departments, as well as their entities, in this year’s audit results compared to the previous year.

He said that public officials should adhere to the prescripts of the PFMA when handling public funds, and that while there were testimony that political principals were implementing recommendations he made in his previous audit, a higher compliance was required from accounting officers.

Speaking at the NCOP on Thursday, the President said Ministers must ensure that officials under their management fulfil all prescripts when handling the public purse.

“In most cases it is the failure to follow procedures stated in the Public Finance Management Act that is a problem and not that money has been stolen. Ministers will ensure that their accounting officers, the Directors-General, implement the remedial action stipulated by the Auditor-General. 

“We will discuss the matter with Premiers and the SA Local Government Association as well when we meet next in the President’s Coordinating Council,” he said.

President Zuma commended all government departments that obtained clean audits for the first time. He said those departments have proved that it is possible to improve management systems in government.

The President said, meanwhile, that based on the recently released municipal audit outcomes for the 2013/14 financial year, the intensive Back-to-Basics programme was making an impact in municipalities in financial management.

He said all provinces showed an improvement in their audit outcomes, with the biggest contributors to the total number of clean audits being Gauteng, KwaZulu-Natal and the Western Cape.

“For municipalities, 96% submitted their financial statements for auditing by 31 August 2014. This is a major improvement from the 78% in 2007/08. 

“The number of unqualified audit opinions on financial statements improved to 58% from 49% in the previous year. 

“The Gauteng Provincial Treasury assisted the two municipalities that are at risk, namely the Westonaria and Randfontein local municipalities, with preparations for the 2014/15 audit by the Auditor-General. 

“This support resulted in a significant improvement in the financial management of both Westonaria and Randfontein Local Municipalities,” he said.

The President said In the Free State, through the intensive interventions of the Back-to-Basics Crack Teams as well as the Premier’s Operation Hlasela programme and the Municipal Infrastructure Support Agent, some municipalities improved their audit outcomes.

This includes the Mangaung Metro, which improved from qualified to unqualified audit opinions and the Tokologo local municipality, which moved from getting a qualified audit opinion to getting an unqualified audit.

The Naledi local municipality from moved from a disclaimer to a qualified audit opinion.

The President said in the next phase of the Back-to-Basics approach, government will work smarter and innovatively to increase the impact.

He said government will make better use of available monitoring mechanisms such as unannounced municipal visits, spot checks of supply chain management processes, implementation of forensic reports recommendations and site visits of Municipal Infrastructure Grant funded projects. 

“Corruption will be tackled with vigour and determination, as the uprooting of corruption is a core objective of the Back to Basics programme. 

“Already two hundred and twenty two officials were dismissed for fraud and corruption in the nine months from October 2014 to June 2015,” he said. –

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