Each and every year the Auditor General (AG) is supposed to conduct audits of over 758 national and provincial government entities in line with the Public Finance Management Act (PFMA) and that figure gets to over 1000 if one takes into consideration municipal entities under the Municipal Financial Management Act (MFMA) which are audited under a different audit cycle. The latest audit report issued for PFMA entities showed a staggering figure of R45,6 billion on irregular expenditure (this is from audit of just over 400 entities).

One of the key conclusions made by the AG from the 2017-18 audits is that various role players have been slow in implementing AG recommendations and in certain instances even blatantly disregarding key recommendations. This resulted in limited improvement in accountability on government spending. The challenge of the slow response by entities management continues to be highlighted as the main root cause of poor audit outcomes, and the experience is that management at 28% of the entities, is just not responding at all.

As a response to curb the vicious cycle that the AG has to go through over the years, The President has signed into law Public Audit Amendment Act towards the end of 2018 and the Act aims to provide the AG with more power to ensure accountability with public sector entities.The Act is intended to provide for the AG to refer suspected material irregularities arising from an audit performed to a relevant law enforcement agencies for investigation.

Under the Act the AG will also now be allowed to take appropriate remedial action and to issue a certificate of debt where an accounting officer or accounting authority failed to recover losses from a responsible person and to instruct the relevant executive authority to collect the debt.

The amendments should not be seen to take over the functions of the accounting officer or authority, as their accountability responsibilities are clear in the PFMA and still stand. This is a critical recourse for areas where those responsibilities are not fulfilled in spite of AG reports alerting the management to irregularities that should to be investigated and dealt with and are conveniently ignored as it happens at times. Through these amendments we are likely to see more consequences for wrongdoing as accounting officers will have to take action or else be held personally liable for the losses incurred under their watch.

The date for the implementation of the act has not been promulgated but is likely to be in the new financial year, and the NSG will be running awareness sessions as this Amendment Act will be ground breaking in accountability within the public sector.

 

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