2019/20 Departmental Audit Outcomes
National departments, provincial departments and public entities are subject to annual auditing by the Auditor-General of South Africa (AGSA). AGSA’s annual audits examine three areas: fair presentation and absence of significant misstatements in financial statements; reliable and credible performance information for predetermined objectives; and compliance with all laws and regulations governing financial matters.
AGSA can express one of the following audit opinions:
Clean audit outcome: the financial statements are free from material misstatements and there are no material findings on reporting on performance objectives or non-compliance with legislation.
Unqualified audit with findings: the financial statements contain no material misstatements but findings have been raised on either reporting on predetermined objectives or non-compliance with legislation, or both these aspects.
Qualified audit opinion: the financial statements contain material misstatements in specific amounts, or there is insufficient evidence for AGSA to conclude that specific amounts included in the financial statements are not materially misstated.
Adverse audit opinion: the financial statements contain material misstatements that are not confined to specific amounts, or the misstatements represent a substantial portion of the financial statements.
Disclaimer of audit opinion: the department provided insufficient evidence in the form of documentation on which to base an audit opinion. The lack of sufficient evidence is not confined to specific amounts, or represents a substantial portion of the information contained in the financial statements.
Some highlights of this year’s national departmental audit outcomes are as follows:
- No national department received an adverse or disclaimer audit opinion this financial year.
- The Department of Telecommunications improved its audit outcome from unqualified with findings to clean audit.
- Eight departments maintained clean audits.
- The Department of Traditional Affairs regressed from a clean audit to an unqualified with findings.
Early September, AGSA briefed Parliament on the first special report on the management of government’s Covid-19 initiatives. The AG reported that the information technology systems used in government were not agile enough such that pre-existing deficiencies in the supply chain processes of government were amplified by the introduction of the emergency procurement processes allowed for personal protective equipment. In several instances, there were clear signs of overpricing, unfair processes, potential fraud and supply chain management legislation being sidestepped. These observations, among others, would explain the audit failures or stagnation i.e. not improving and achieving a clean audit for most departments.
*At the time of publication, audits for the following seven departments were still outstanding: Correctional Services; Environmental Affairs; Home Affairs; International Relations; National Treasury; Rural Development & Land Reform; Water & Sanitation.
See infographic below on the 2019/20 National Departmental audit outcomes:
About this blog
"That week in Parliament" is a series of blog posts in which the important Parliamentary events of the week are discussed.