CEO Vidhu Vedalankar said the entity had contracted with a number of legal practitioners who had not supplied tax clearance certificates.

It earned the entity a note of non-compliance from Auditor General Terence Nombembe, and on Tuesday, a remark from Democratic Alliance MP Debbie Schafer that the situation was "shocking".

Nombembe faulted Legal Aid SA for giving work to lawyers "whose tax matters had not been declared by the SA Revenue Service to be in order".

Vedalankar said the non-compliance mainly referred to failing to get tax certificates from lawyers in cases that cost more than R30,000.

She said Legal Aid SA had sought to remedy the situation by instituting a rule that all legal practitioners placed on its database must in advance supply tax clearance certificates.

Vedalankar said the entity had supplied legal aid to 682,962 people in the past year, mostly in criminal cases. She said it had achieved a success rate of 66 percent in criminal appeal matters, contradicting a perception that it provided second-rate representation to clients.

"It is our best year," she told MPs, pointing out that the average success rate in the Supreme Court of Appeal in the same period was 54 percent.