Gauteng achieves record audit outcomes as it moves towards clean government

A total of nineteen departments and entities achieved clean audits in the 2013/14 financial year; an indication that government is making steady progress in strengthening financial management to eliminate wasteful and unlawful usage of public funds.

This is a milestone for government compared to the previous three years. It means that the five departments and three entities who achieved clean audits in 2012/13 financial year sustained these outcomes in 2013/14. In addition, one department and ten more entities improved to clean audit this year, enabling government to achieve a record nineteen clean audits in 2013/14.

"This is the first time that we achieved this number of clean audits. It shows that we are an activist government that promotes clean governance and the integrity of our public institutions. This is necessary to enhance popular democracy, accelerate service delivery and maintain the public's trust and confidence in government," Finance MEC Barbara Creecy said.

"Our people expect us to build an accountable and clean government that is able to serve them better. This is what we are focused on doing. We are a responsive people-centred government that is transparent and on the ground to improve services to the people," she explained.

These achievements have been made possible through various key initiatives. The integrity of supply chain management in departments has been enhanced by partnering with the State Security Agency to conduct comprehensive background checks on all officials who are tasked with procuring goods and services on behalf of government.

Training for public officials on financial management has been enhanced to ensure full compliance with rules and regulations, and reassert the principle that government serves the people.

The improvement in financial management has resulted in better service delivery. Investments in public programmes including building of roads, provision of quality of public education and healthcare services have improved to ensure the social net benefit for the people.

As part of Premier David Makhura's vision to radically transform the public service going forward, urgent measures are being introduced to enhance financial processes with the aim of detecting and preventing fraudulent activities. These include opening the tendering process to increase transparency. 

"We have to demonstrate, through our actions, that corruption will not be tolerated. This is important because we fully understand that the economic impact of corruption is most severe on the poor and the downtrodden in society. Corruption and bad financial management take resources away from key public programmes including social grants, education, healthcare, and safety and security," she added.

The following provincial departments achieved clean audits:

• Office of the Premier
• Provincial Legislature
• Provincial Treasury
• Social Development
• Sport, Arts, Culture and Recreation
• Cooperative Governance and Traditional Affairs

The following departments achieved unqualified audits:

• Education
• Finance
• Roads and Transport
• Economic Development
• Community Safety
• Infrastructure Development
• Agriculture and Rural Development

Government remains conscious of the fact that more work needs to be done in particular in those departments and entities that did not achieve good audit reports during this period. These are the Department of Health, Department of Human Settlements and G-Fleet.

"The intervention team continues with its work in the Department of Health to ensure the provision of quality public healthcare services to our people. Our focus is on payment of suppliers and revenue management. We are also working to establish staffing norms to inform the process of filling vacancies and building of appropriate procedures to strengthen the health system," MEC Creecy said.

The Provincial Treasury is also working closely with the Department of Human Settlement and G-Fleet to address issues that resulted in the failure to achieve desired audit outcomes.   

NOTES TO EDITORS: 

(1)   Unqualified Opinion - indicates the auditor's endorsement of the accuracy and adequacy of the disclosed information and of the department's financial picture as presented.

(2)   Qualified Opinion - may indicate a limited scope of examination, or that the auditor was unable to directly verify certain information.

(3)   Adverse Opinion - indicates serious problems with the audit, and can be very damaging in its effect on the department's reputation and financial position.

FACT SHEET - 2013/14 AUDIT OUTCOMES

1. TREND ANALYSIS

There has been a steady increase in the number of departments and entities achieving clean audits over the past 3 years;

• One department and ten entities improved to clean audits in the 2013/14 financial year;
•  Five departments and three entities sustained their clean audits from the 2012/13 financial year;
• There is a steady decline in the number of departments and entities getting unqualified audits as a result of an increase in clean audits;
• Qualified audit outcomes remain constant over 3 years for departments.

Audit Outcomes Per Department

N/A - Means that the department did not exist in that particular financial year due to mergers and demergers of departments

Audit Outcome Per Public Entity

2. SUPPORT PLANS FOR 2014/15

Government is committed to maintain the clean audits that have been achieved, and at the same time improve audit outcomes of other departments and entities going forward. In this regard we will intensify the plans implemented in the previous financial year and improve in areas, which include amongst other things the following:

• Tracking the implementation of audit action plans to eliminate recurring findings;
• Provide targeted training to departments to improve deficiencies in the key control environment;
•  Intensify the review on the PFMA Section 40 monthly reports; and
• Intensify the Interim Financial Status review to minimise material adjustments to the Annual Financial Statements.

Irregular, Unauthorised and Fruitless and Wasteful Expenditure

A. The following table represent the Irregular Expenditure for the Gauteng Provincial Departments for the past three financial years:

The Irregular Expenditures over the past three years relate primarily to instances of non-compliance with Supply Chain Management rules and regulations. The major item of Irregular Expenditure over the past years has been the extension of bus subsidy contracts including the bus monitoring firms by the Department of Roads and Transport.

B. The following table represent the Unauthorised Expenditure for the Gauteng Provincial Departments for the past three financial years:

In the 2013/14 financial year: Unauthorised expenditure incurred by Education and Safety only with R 55, 5 million and R 1, 3 million respectively.

In the 2012/13 financial year: Unauthorised expenditure incurred by Health and Education only with R 324, 4 million and R 68, 3 million respectively.

In the 2011/12 financial year: Unauthorised expenditure incurred by Economic Development (R 8, 9 million); Health (R 1 billion); Roads and Transport (R 11, 5 million) and Sports (R369 thousand).

C.   The following table represent the Fruitless and Wasteful Expenditure for the Gauteng Provincial Departments for the past three financial years:

The Fruitless and Wasteful expenditures over the past financial years relate mostly to interest due on overdue accounts from various departments and expired medication and litigation settlements relating to Medico Legal for the Department of Health.

Statement issued by the Gauteng Department of Finance, September 14 2014

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