Auditor-General Makwetu raises concern over weak internal controls

The Auditor-General Kimi Makwetu has lamented weak control and lack of consequences for the persistence of poor financial management in provincial and national departments.

Makwetu presented the report of all provincial and national departments and their entities for the financial year 2014/15 in Pretoria today. In total, 468 entities with a combined budget of R1.1-trillion were audited.

While the value of irregular expenditure and unauthorised expenditure all slightly declined, Makwetu raised concern over the weak internal controls and lack of consequences for those who did not comply with the law.

“Management at most most[73%] auditees have been slow to respond to the audit recommendations aimed at assisting them to improve key internal controls and addressing identified risk areas,” Makwetu said.

In the reporting period, irregular expenditure decreased by 27% to R25.7-billion. Fruitless and wasteful expenditure decreased from R1.2-billion in the previous financial year to R936-million. Unauthorised expenditure also decreased from R2.6-billion to R1.6-billion.

The Auditor-General office had to correct some of the information provided by most of the departments for them to receive a better audit outcome. Makwetu said of the 355 auditees which received an unqualified audit, 131 would have had a qualified audit had it not been for the help received from his office.

He said three basics had to be followed:

- implementing plans to address deficiencies in financial controls based on commitments already made;

- providing effective leadership and monitoring achievement of performance targets;

- reviewing and monitoring compliance with key laws and legislation over financial matters.

The Auditor-General said it was important to get the “big three” which is education, health and public works. These three took over R411-billion (37%) of the total budget but only managed three clean audits in 30 entities.