Sixteen national and provincial government departments and entities audited by the office of the Auditor-General of SA under his new powers uncovered 28 cases of material irregularities and potential losses to taxpayers of R2.8-billion. But in the new financial year, says AG Kimi Makwetu, 89 out of 422 departments and state-owned entities – which account for a staggering 79% of South Africa’s budget – will be audited. The 89 audits will be carried out across all nine provinces but focus on five key areas that account for the largest chunk of the public purse: infrastructure, education, health, state-owned entities and water and sanitation.
This follows the enactment of the Public Audit Amendment Bill in April last year which saw his powers extended and gives him the authority to lay criminal complaints with the relevant law enforcement authority. Makwetu announced the sweeping and wide-ranging forensic audits when opening the annual Public Sector Forum at Emperors Palace in Ekurhuleni this morning.
The annual event is hosted by the Institute of Internal Auditors SA (IIA SA) with over 300 – of its 8 000 members – from government departments and state-owned entities attending the two-day event. The theme for this year’s forum is “A Bird’s Eye View” and, as in recent years, issues to come under the microscope include corruption, state capture, promoting ethical behaviour, the impact of the fourth industrial revolution on the internal audit sector and ensuring corporate governance becomes a daily reality. Makwetu talked of “Strengthening Public Trust through Accountability and Transparency” and said internal auditors were now at the forefront of safeguarding the public purse and ensuring good governance. He said optimism in SA’s socio-economic outlook may be low but “nobody said it would be easy”.
Makwetu said that he had “spoken at length to various levels of leadership in the country” and had said to them that the plan should not be how to achieve a clean audit “but to use that money, including the assets you list in the balance sheet, for what they were destined for”. He said the internal audit was thus a “first line of defence” and responsible for ensuring “preventative controls and mechanisms”.
“For example, procurement processes needed to be controlled to ensure no unnecessary spending. Tender controls can also be tightened while conflicts of interest must be identified at the initial phase of any process,” Makwetu said.