Auditor General's briefing on National and Provincial PFMA Audit Outcomes


18 Jan 2011

The Auditor General (AG) of South Africa, Mr Terrence Nombembe announced the introduction of quarterly financial reviews for government departments. These would be undertaken to provide the AG and underperforming Departments with an early warning to avoid qualified audits and financial mismanagement. The reviews would be instituted at a provincial and national level and would be provided in the form of interim reports to defaulting departments.


Q: Are the quarterly reports going to be made public? Does the AG’s office have enough capacity to carry out the quarterly reports?

A: The AG replied that the quarterly audit reports would not be mad public and would serve as interim reports issued to defaulting departments to help them get their affairs in order prior to the full financial audit. The AG’s Office had enough capacity to handle these quarterly audits.

Q: Is the implementation of the quarterly reports being undertaken at the insistence of the President? How do the quarterly reports tie into the anti-corruption drive?

A: The AG replied that this was an initiative of the AG. It was brought about by the engagement of the AG with the national legislature and the executive who expressed concerns over qualified audits. Most of the information gathered by the quarterly audits would feed into the anti-corruption drive to assist in preventing corruption where it may occur.

Q: Which areas will the quarterly report look at primarily? Is there an action plan in place to guide the carrying out of the reports?

A: The AG replied the quarterly audits would focus primarily on areas that were problematic for a lot of Departments in the past such as human resource management for instance. The quarterly audits would be guided by the level of effectiveness that they achieved in the various Departments with regard to areas of concern.

Q: If the same issues keep arising on an annual basis and show no sign of altering, what is the point of the quarterly audits?

A: The AG replied that his Office had seen an improvement in areas which it had previously highlighted as being of concern and that could only have been have achieved through the audits. He hoped that the quarterly audits would assist in departments avoiding persistent mistakes in the same areas leading to a qualified audit.

Q: Will the quarterly audits necessarily stop corruption in Department’s like the type seen in 2010 when officials bought World Cup tickets with public funds? Does the AG’s office have the power to stop this sort of excessive spending?

A: The AG clarified that these audits were designed to highlight areas where departments were not performing rather than to show over-expenditure. Where the audits picked up financial irregularities, the AG’s office would send that information to the relevant authority to take action.

Q: Do we have a registry of government property as yet and if not then why?

A: The AG explained that there was no registry of government property as yet and this was mainly due to the issues of human resources needed to carry out the task. It was an area of concern but the task would be taken up soon and assessed.

Q: How will the quarterly audits prevent the overuse of outsourced human resources by Departments?

A: The AG replied that the audits would highlight expenditure on things like outsourced human resources and encourage Departments to fill their vacancies rather than rely on outsourcing which tends to cost more.

Q: Will quarterly reviews happen at departments where it was impossible to carry out financial audits due to a lack of information in some areas?

A: The AG replied that the quarterly audit process would not be hindered by the departments that failed to provide some information on certain areas of expenditure in the last fiscal year as most of those issues had been dealt with. Quarterly audits would also assist in avoiding those sorts of issues prior to the final audit as they would be flagged and raised with the defaulting Department.

Q: How can the AG be sure that the commitment to this new initiative from the Presidency and the executive is genuine considering some of the false promises made in the past?

A: The AG replied that his Office had had positive engagement with the Executive on this issue and had received their absolute backing. He therefore had no doubt that this initiative would receive the necessary support.

Q: When will the first quarterly reviews be conducted? When will the report on the use of consultants by Departments be released? Will the quarterly reviews be brought before parliament?

A: The AG replied that the quarterly reviews were ongoing and had started soon after the completion of the 2010 financial audits. Parliament would receive the quarterly reviews; however it was uncertain at the moment as to whether the recommendations in the reviews would be made public by the relevant parliamentary/provincial committees. This matter was still being discussed. The report on consultants would be released soon but he could not give a date on that.

Q: Has the reshuffling of Cabinet had any effect on the conduction of the reviews?

A: The AG replied that the reshuffling had not had an effect on the reviews due to the fact that the quarterly reviews were targeted at Departments and not personalities within government. Thus the commitment made by Departments was binding regardless of the person in charge of a particular Department.

The briefing was adjourned.


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