Phuti Mosomane
Auditor-General (AG) Tsakani Maluleke on Wednesday reported “an overall improvement” in the national and provincial government audit outcomes.
However, Maluleke also noted that there were 2 394 unoccupied government properties, most of which have not been maintained and are in a bad state.
Yet rates and taxes are levied on them.
“When there are not enough fit-for-use properties available to departments, the Property Management Trading Entity needs to enter into lease agreements – which could have been avoided if properties had been properly maintained,” Maluleke reported.
Maluleke further cautions that such lease agreements are often costly to the government because of high annual increases and higher-than-average market rates being paid.
In 2022-23, the AGSA audited 137 infrastructure projects, focusing on critical infrastructure including health facilities, schools, housing, roads and railways, water infrastructure, and government buildings such as police stations.
“Our audit work incorporated numerous site visits by our multidisciplinary audit teams, who applied their expertise to inspect project progress and quality,” says Maluleke. “We reported findings on 112 (82%) of the projects that we visited. We found that, all too often, infrastructure delivery projects have been delayed, are costing more than planned or are of poor quality. There are also delays in newly built infrastructure being put to use.”
Maluleke says when auditees, especially high-impact auditees, do not properly manage their performance, finances and infrastructure, “it directly affects the delivery of key government programmes that are intended to improve the lives of South Africans and to alleviate hardships stemming from tough economic conditions and poverty.
“Wasted money and resources means reduced funding for service delivery programmes and, eventually, a greater burden on taxpayers”.
The public works sector is responsible for maintaining government properties, including health facilities, police stations and buildings that accommodate departments.
However, many government properties are in poor condition because of the sector’s reactive approach to maintenance. Most maintenance work is only done in response to emergency requests and little time or budget is spent on preventative maintenance.
Government officials and the public continue to use properties that are in poor condition, which lowers the effectiveness of the working environment and puts the safety of officials and the public at risk.
“There are currently 2 394 unoccupied government properties, most of which have not been maintained and are in a bad state. Even though these properties are not used, costs such as property rates and taxes still need to be paid.
Tabling the 2022-23 general report for national and provincial departments, their entities and legislatures in Parliament, Maluleke said the outcomes reflect an overall improvement over the term of the current administration, now in its fourth year.
However, she pointed out that there are still weaknesses in planning, monitoring and reporting on service delivery; challenges in infrastructure management; and increasing pressure on the fiscus due to a lack of prudence in spending.
“Over the administration’s term, we have seen some encouraging signs of improvement in the ability of national and provincial governments to transparently report on their finances and performance and to comply with key legislation.
However, those auditees with the greatest impact on the lives of South Africans and on government finances, which we refer to as ‘high-impact auditees’, are lagging behind on financial and performance management disciplines. This is placing further pressure on government finances,” Maluleke noted.
These high-impact auditees comprise departments, public entities and state-owned entities that are collectively responsible for 85% (R2,64 trillion) of the expenditure budget.
They contribute to delivering health services, skills development and employment, infrastructure development, safety and security, water and sanitation, energy, and environmental and financial sustainability.
The AG cautioned that when auditees, especially high-impact auditees, do not properly manage their performance, finances and infrastructure, this directly affects the delivery of key government programmes that are intended to improve the lives of South Africans and to alleviate hardships stemming from tough economic conditions and poverty.
Based on the insights on service delivery planning, monitoring and reporting, infrastructure and financial performance, the national audit office identified three main weaknesses that inhibit progress:
• a culture of no accountability and consequences
• ineffective resource management
• inadequate intergovernmental planning, coordination and support.
“If those in the accountability ecosystem charged with governance, administration and oversight were to diligently implement our recommendations, more public institutions would be characterised by good governance, sustained performance and responsiveness to the service delivery needs of South Africans,” adds Maluleke.
The AG reported that through the material irregularity (MI) process, accounting officers and authorities have taken action to prevent or recover financial losses of R2,55 billion since 2019, with some of this amount still in the process of being recovered.
“From 1 April 2019 (when the amendments to the Public Audit Act became effective and the AGSA began implementing the MI process) until 30 September 2023 (the cut-off date for MIs to be included in the latest general report), the audit office identified 266 MIs.
“We estimate the total financial loss of the 240 MIs that involved a material financial loss to be R14,34 billion. The 26 MIs with an impact other than financial loss involved material public resources not being used (most often health facilities), harm to the general public due to infrastructure neglect and poor-quality service delivery, and harm to public sector institutions mainly because of the non-submission of financial statements,” the AG pointed out.
“We are pleased that the MI process is proving to be effective in enforcing accountability and protecting state resources. Departments and public entities can direct the recovered funds towards service delivery, enabling the government to achieve its strategic priorities,” Maluleke says.
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