Government should be jolted into action by the depressing and scandalous Auditor General's reports on state institutions

13 December 2021

The Congress of South African Trade Unions (COSATU) has noted the Auditor- General Tsakani Maluleke’s report on various government departments, entities, and State-Owned Enterprises (SOEs) tabled in Parliament last week. The report reads like a horror story of corruption, collapse of good governance and a blatant disregard for even the basic norms of accountability. It reveals a culture of impunity and where there is no accountability and there are no consequences for doing wrong things.  

The government needs to act swiftly on the AG’s damning findings against numerous departments, entities and SOEs. Some of the key findings from the AG’s report include: 

An increase from R110 billion to R166 billion in irregular expenditure over the past year. 

R3.2 billion in unauthorized expenditure. 

Only one SOE, the Development Bank of Southern Africa, received a clean audit. 

A miniscule increase from 109 to 115 in government institutions receiving a clean audit. 

Some SOEs have not bothered to support audits for years, e.g. SA Express (now liquidated), SAA (being resuscitated) and DENEL (has not paid salaries in full since 2020).

Some entities have yet to submit reports for the current year, the Unemployment Insurance Fund, Compensation of Injury on Duty Fund, National Skills Fund; and 

Other SOEs flagged include PRASA, Alexkor, the Post Office, Land Bank, and the Free State Development Corporation. 

The efforts by the AG to issue instructions to offending departments are welcome and we expect the AG to exercise the full powers provided to her office in the 2018 Auditing Amendment Act.   

The decision to issue binding remedial directives represents a step in the right direction. This should be followed by the issuance of debt recovery instructions to offending accounting officers, other implicated officials, and private sector suppliers.  This is the only way to restore a culture of good governance in a state that is notorious for failing to act against staggering levels of malfeasance and outright criminality. 

It is disappointing that instead of dealing with this mismanagement of resources, government has resorted to increasing austerity measures by implementing cuts in public spending, leading to massive reduction in all aspects of social and economic benefits to the people, in wages, retirement benefits and pensions, health and education and social welfare transfers. Public servants are being denied their wage increases, while decisionmakers responsible for this mess remain untouched. 

Fixing the state is crucial because it will enable it to deliver quality basic services, restore SOEs to fulfill their roles in the economy, enable government to fill badly needed frontline posts and ensure public servants can receive increases to protect their wages from inflationary erosion. 

The Federation is also calling on the National Treasury that is entrusted with managing our limited national resources, to take drastic steps to ensure that there are consequences for those who fail to comply with regulations and procedures. 

We also call on law enforcement agencies to act on the threats and intimidation directed against the officials of the AG’s Office; such acts of criminality cannot be accepted in a country that is governed by laws.

Issued by Sizwe Pamla, National Spokesperson, COSATU, 13 December 2021