Public Works Minister Gwen Mahlangu-Nkabinde's department has been given a disclaimer, one of the worst audit reports possible, according to a report on Tuesday.
Auditor general Terence Nombembe said he found, among other things, irregular expenditure amounting to R16.5 million.
Also, the department could not verify or account for material losses of R54.8 million in a public-private partnership for vehicle leases.
Nombembe said another problem was an inability to obtain evidence of R1.3 billion in capital transactions.
There were also questions around the immovable assets of the department, which is the custodian of most of the government's property portfolio.
"I was unable to obtain sufficient and appropriate audit evidence to satisfy myself as to the completeness, existence, rights, valuation and allocation of properties recorded in the immovable asset register of the department stated at R3.4 billion," Nombembe said, according to a report in Business Day newspaper.
In reaction, Mahlangu-Nkabinde said the situation was "salvageable".
"...progress towards financial stability and good corporate governance is under way," she said.
In two separate reports this year, Public Protector Thuli Madonsela held Mahlangu-Nkabinde and national police commissioner Bheki Cele responsible for a R500 million and R1.1 billion lease agreement with businessman Roux Shabangu for police office space in Pretoria and Durban.
Madonsela found the leases were concluded in an unlawful and improper way.
Last week, Mahlangu-Nkabinde applied to the High Court in Pretoria to have a controversial police lease, worth R2 billion, declared null and void.
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