Despite the government’s repeated commitments to address service delivery issues, it will be a while before South Africa has an accountable public service. The sorry state of affairs in the national and provincial government was highlighted yesterday, when auditor-general Terence Nombembe revealed that only 117 of the 536 entities had received a clean audit for their 2011/12 results.
A clean outcome reflects a report “free of material errors or omissions”.
Nombembe said 74 percent of the entities received poor audit results because they failed to comply with the basic laws applicable to the running of their administration.
He also noted that 287 entities had reported a failure to comply with supply chain management laws in the previous financial year. He referred to a special report his office produced three years ago, which “highlighted the conflict of interest when public servants and at times their relatives do business with government”.
He flagged the risks to the financial health of national and provincial government “flowing from poor budget management, cash and debtors management by departments and financial management by some public entities. These indicators reflect that the fiscus could be placed under further pressure if such risks are not addressed.”
Rating agencies, which have already downgraded South Africa’s sovereign and sub-sovereign debt will view the findings in a serious light.
Nombembe described the current situation as one of “stagnation and regression”. And he blamed it on leadership, which “did not set the right tone in leading change in their respective portfolios”.
Minister in the Presidency for Performance Monitoring and Evaluation Collins Chabane said his department would work with the Treasury, and the Department of Public Service and Administration to “assist departments with the development of further improvement plans”.
In his report, Nombembe said the majority of “auditees” were still experiencing challenges, with 297 receiving “unqualified opinion with findings”. This meant there were no “material misstatements”, but the auditors had highlighted certain issues.
Even worse, 74 received qualified opinions and 17 an adverse opinion or disclaimer. A disclaimer means there is not enough information to form an opinion. And 31 audits are “outstanding, mainly due to the non-submission of financial statements by the relevant entities”.
Nombembe identified entities that had addressed weaknesses in their previous year’s audits. They included five departments, the Public Service Commission, the Free State Legislature, the Mpumalanga Premier’s Office, the Western Cape Department of Environmental Affairs and Development Planning and the Western Cape Provincial Treasury.
Twenty eight other public entities, mainly in the Western Cape and Gauteng, also moved to a clean audit. Seventy eight maintained their clean audit. These included the provincial treasuries of the Free State, KwaZulu-Natal and Mpumalanga, the Free State Premier’s office, the Western Cape Legislature and the Department of Public Enterprises.
Also in this category were the SA Revenue Service, the Unemployment Insurance Fund, the Land Bank and the Independent Regulatory Board for Auditors, as well as 15 smaller funds, boards and trusts.
Slipping down the scale, after previously receiving clean audits, were the Mpumalanga Legislature and the Wholesale and Retail Seta.
Nombembe said there had been a series of recent government announcements “aimed at bolstering the public sector’s clean administration drive”, and said these would go a long way in addressing the government’s supply chain challenges.