Cape Town - The financial position of national departments is steadily improving with the number of qualified audit opinions and disclaimers having declined to 25% in the last financial year, from 42% in 2009.
Briefing Parliament's Standing Committee on Public Accounts (Scopa) and officials from the National Treasury on the audit outcomes on national departments and national public entities for the 2011 financial year, Deputy Auditor General Kimi Makwetu said provincial legislatures had also improved to the point that half of legislatures now had clean audits - up from just 10% last year.
Makwetu's briefing today follows a similar briefing presented to President Jacob Zuma and his Cabinet last Wednesday.
However, despite the improving financial position of national departments, the number of clean audits departments had been awarded had declined from 16% in the 2009 financial year to eight percent in the last financial year.
Those departments that achieved clean audits in 2011 were environmental affairs, science and technology and public enterprises.
The number of clean audits also declined for public entities - from 44% of agencies in 2009 to 36% or 209 entities in 2011, while 13% or 63 of provincial departments achieved clean audits in 2011 - down from 17% last year.
Twelve public entities, four provincial departments and one national department - public works - received disclaimers.
The four provincial departments that received disclaimers were the department of education in the Eastern Cape, the North West's public works, road and transport, as well as the health departments of the Northern Cape and Limpopo.
Makwetu said more attention needed to be paid to improving the financial and accounting situation of the departments of education, health and public works as these accounted for about 70% of the national budget he stressed.
Of the 37 national departments, 34 failed to comply with laws and regulations - most of this relating to expenditure management and procurement and contract management.
Makwetu said these two areas were related because if contracts were not properly in place with contractors non-compliance with the management of expenditure would also be likely.
The Auditor-General's report also found that the amount of unauthorised expenditure among departments and public entities was down 50%, to R3.8 billion from R8.9bn last year.
However, irregular expenditure had increased from R13 billion in 2010 to R21.1 billion, while fruitless and wasteful expenditure had tripled to R1.5 billion over the previous year.
Provincial departments accounted for over half of all irregular expenditure (R16.2 billion), public entities R2.6 billion, national departments R2.2 billion and the legislatures R53 million of the total amount.
Makwetu said key concerns for departments when it came to supply-chain management were those of uncompetitive or unfair procurement processes, inadequate controls and awards being given to state officials and their close family members.
He said the national audit office had begun holding quarterly meetings with departments to assist them on some of the issues that had been highlighted by the Auditor General.
The meetings focused on three key areas, namely: selecting the correct leadership for departments and public entities, improving their financial and performance management and shoring up the internal audit committees of each respective department or agency.
"In departments where there has been a consistent focus on these issues we've seen some results, and in departments where there hasn't been any attention given to these, things have gone bad," said Makwetu.
Officials from the National Audit Office also touched on their audit findings of various departments.
When it came to the Department of Home Affairs, a department which has up till this year had yet to receive an unqualified audit, corporate executive Jan van Schalkwyk, praised the department's leadership: "I think there's huge credit due to the minister and DG to making this happen".
However, he pointed out that there was still work to be done at the department towards getting it to become a stable control environment, but he believed that this was possible if the department's leadership continued to press ahead.
Corporate executive Barry Wheeler highlighted the success of South African Social Security Agency (Sassa) in bringing down the value of the social grants which could not be accounted for - from a figure of about R10bn to R800m.
While Wheelers stressed that more work however had to be done to reduce this figure to zero, he stressed that a change in leadership at Sassa, as well as the introduction of interns to review the files of those receiving grants and the implementation of added checks for those receiving grants, had helped to bring down this the amount of unaccounted monies.
Meanwhile, corporate executive Paul Serote said the pace of progress on cleaning up the immovable assets registries of the departments of rural development and public works had been slow and suggested action be taken to expedite matters.
