Auditor-general Tsakani Maluleke has credited the actions taken by accounting officers in government as being central to the recovery of financial losses totalling R1.29 billion in the 2022/23 financial year.
Accounting officers have also prevented financial losses to the tune of R560 million during the same period.
At least R700m in financial loss was in the process of being recovered in the national and provincial governments.
Maluleke made the statement when she briefed the Press Gallery Association on the powers her office has to take remedial action and issue a “certificate of death” when an accounting officer or authority fails to comply with her remedial action.
Her office was given the powers in 2019 after it emerged that the findings and recommendations made by her office were not taken seriously by the state institutions.
In terms of the law, accounting officers are obligated to prevent all irregularities and take action when they occur.
The Auditor-General South Africa now identifies material irregularities and notifies the accounting officer and/or executive authority.
Maluleke said their role was to complement the mechanism platforms aimed at improving accountability systems.
“Ours is to complement what they do,” she said.
Maluleke’s office started with 25 auditees that were selected for the implementation of her new powers in 2019.
The number now stands at 709. “We are now aiming to drive full coverage in the 2024/25 (financial year),” she said.
Maluleke said when accounting officers fail to respond to findings and recommendations, her office makes a follow-up before making binding recommendations.
“If the public sector adopts a culture that embraces transparency, accountability and performance, we will be able to get better outcomes,” she said.
“Many of the things we identify are things that should not have arisen but also should have been attended to by the accounting officer before they arise.
The vast majority were simply not dealing with issues until we issued material irregularity,” she said.
Maluleke added that the type of responsiveness they had seen was not translating to the normal audit outcomes.
The auditor-general said her office issued 266 material irregularities on non-compliance and suspected fraud in 2022/23 in the provincial and national departments.
A total of 240 material irregularities were material losses estimated at R14.34bn. There were also nine material irregularities for misuse of material public resources, three substantial harm to the general public and 14 substantial harm to the public sector institution.
“No actions were taken to address 82% of the matters until we issued notifications.”
The auditor-general also issued 268 material irregularities in the local government sphere where 194 were material financial losses estimated at R5.19bn.
“No actions were taken to address 86% of matters until we issued notifications,” she noted.
Most of the incurred financial losses would not be recovered, she said.
“If you look at the issues that are sitting there, it is cumulative, so some of them would have been matters that arose in 2019 or even before, and when you have got liquidations in process, you are not going to get that money back,” she said.
She said South Africans should be worried when threats are made to auditors for auditing the finances at public institutions.
“There are still instances where our teams do experience intimidation and threats. What we do then is we protect our team in terms of making sure they are safe. It is not prevalent. There are a couple of hot spots that we are aware of,” Maluleke said.
Cape Times