By Thapelo Molefe
While there have been no qualified audits for the departments and state entities in Gauteng, Finance and Economic Development MEC Lebogang Maile is concerned about the provincial government not complying with legislation.
The report by the Auditor-General revealed that out of 14 provincial departments, seven achieved clean audit outcomes, which was an increase from six in the previous year.
Notable improvements were made by the Community Safety Department, which upgraded from an unqualified opinion to a clean audit.
The latest audit outcomes for the 2023/2024 financial year revealed a mixed bag for Gauteng provincial departments.
Maile said non-compliance with legislation remained a significant problem.
He said seven departments, including health, received unqualified audit opinions with findings, primarily due to material non-compliance with supply chain management legislation and expenditure regulations.
This had led to increased instances of irregular expenditure, compromising the financial health of these departments.
“The GDoH is the only department with non-compliance across all areas including grant management, revenue management, procurement and contract management, asset management and human resources. This indicates lack of effective internal
control environment in multiple areas,” Maile said.
Furthermore, the MEC said five departments, including health, struggled with consequence management, failing to implement recommendations from completed investigations.
Among the 19 audited entities, 14 achieved clean audits, representing 74% of the total.
The Gauteng Housing Fund received an adverse opinion, indicating significant problems. However, Maile said this represented a slight improvement from the previous year’s disclaimer.
He said other entities, such as the Gauteng Enterprise Propeller and the Medical Supplies Administration System were non-compliant with expenditure management and supply chain management laws and regulations.
“The non-compliance issues highlighted by the Auditor-General of South Africa are a cause for concern,” the MEC said.
“We are committed to addressing these concerns and ensuring improvement in audit outcomes for the 2024/2025 financial year.”
Maile said the provincial treasury had put mechanisms in place to provide non- financial support to departments and entities to address the issues raised by the Auditor-General.
“One of the key objectives of the GPT (provincial treasury) is to facilitate a substantial decrease in irregular expenditure incurred by departments and entities.
“In this regard, working with departments, GPT is developing interventions to help departments and entities to strengthen weak internal controls and a lack of adequate management reviews in the financial reporting processes,” he said.
There has been significant non-compliance in supply chain management, internal financial controls, consequence management, and various functional areas such as grants, revenue, procurement, asset and human resource management.
Maile added that the province was also developing an aggressive revenue enhancement strategy to improve revenue generation and collection.
As of August 2024, the province recorded a total revenue collection of R3.46 billion, exceeding expectations slightly. The provincial treasury anticipates that increased revenue from interest and improved collection efforts will contribute positively to the financial outlook.
The province’s finances are under strain. As of August, overall expenditures stood at R72.9 billion or 49% of the main budget, with a projecting an overspend of R7.4 billion.
This overspending is largely attributed to health, social development and economic development.
Infrastructure remains a critical area for investment, with a budget of R12.7 billion allocated for new projects and maintenance. However, expenditure as of August stood at R4.7 billion, which is 4% below the ideal projection.
As the provincial government works to address these challenges, residents and stakeholders can expect regular updates on progress.
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