AG notes improvement in financial reporting


Auditor-General Tsakani Maluleke says there has been an improvement in the responsiveness of financial reporting in government. That is since her office’s powers were extended to include the process of material irregularity, as per the amendment of the Public Audit Act.

The move gave the Auditor-General (AG) new powers to go beyond auditing and reporting by also contributing towards improving consequence management within the state.

The AG says her office is now seeing a change in how accounting officers and authorities respond to what the office elevates as material irregularities.

Material irregularities refer to the contravention of legislation, fraud, theft or a breach of fiduciary duty identified during an audit.

Briefing Parliament’s Standing Committee, the Auditor-General said procurement and payments remain the main source of material irregularities.

She says 179 material irregularities on non-compliance and fraud have been identified for national and provincial governments.

Of these, 169 have an estimated financial loss of R12 billion while nine others are deemed to pose serious harm to public institutions.

She says non-compliance to rules usually leads to over-pricing of goods and services and appointed suppliers being unable to deliver.

“There is improved responsibility in the system, accounting officers are responding to MIS, what we are hoping to do is influence them to translate this particular level of responsiveness to responsiveness and action on audit outcomes even those that come out of internal audit, so that over time we strengthen systems and controls. We can prevent similar ones in the future,” says Maluleke.

The AG has welcomed the announcement by President Cyril Ramaphosa in connection with her office conducting real-time audits during the electricity crisis state of disaster. She says interventions will be shaped following an assessment of possible risks and resources will then be deployed accordingly.

“We welcome the opportunity to still serve as an independent assurance provider to government and still contribute to building confidence in the public to protecting resources, limiting leakage and ensuring that the resources that have been allocated are spent in the best way possible for the purposes for which they were intended. It’s still early days in the journey for now, we are currently engaging with the stakeholders involved with the response. It may take some time before we all have our minds wrapped around what the actual response will look like, once we have been able to engage with all of the state, once we have done that we will sit as the audit office and shape our own intervention. That’s going to be informed by how we assessed the risks and the resources we are able to deploy in addressing those risks,” Maluleke elaborates.

The AG says there have been 19 cases of material irregularities where accounting officers had not taken adequate corrective action and eight of these have been referred to bodies charged with investigations and law enforcement.

The post AG notes improvement in financial reporting appeared first on SABC News – Breaking news, special reports, world, business, sport coverage of all South African current events. Africa’s news leader..