Auditor General Kimi Makwetu says there is a growing trend of municipalities that are not following recommendations from the audit office, but has indicated that they now have the power to issue binding recommendations.
A total of 74% of the municipalities did not adequately follow up allegations of financial and supply chain management misconduct and fraud #AGReport
— Auditor-General SA (@AuditorGen_SA) June 26, 2019
He was speaking during a media briefing in Pretoria – on the local government audits of 257 municipalities for the 2017/18 financial year.
45% of the municipalities did not have all the required mechanisms for reporting and investigating transgressions or possible fraud. #AGReport
— Auditor-General SA (@AuditorGen_SA) June 26, 2019
The Auditor-General’s last report indicated that R80 billion in irregular expenditure; was incurred over the past financial year.
As a result, the year-end balance of irregular expenditure that had accumulated over many years and had not been dealt with totalled R71,1 billion, while that of unauthorised expenditure was R46,2 billion and that of fruitless and wasteful expenditure was R4,5 billion. #AGReport
— Auditor-General SA (@AuditorGen_SA) June 26, 2019
Makwetu says they have seen deteriorating audit results in many respects.
At 62% of the municipalities, the council failed to conduct the required investigations into all instances of unauthorised, irregular and fruitless and wasteful expenditure reported in the previous year – a slight regression from 60% in the previous year. #AGReport
— Auditor-General SA (@AuditorGen_SA) June 26, 2019
“The recommendation that comes out of an audit that shows that there has been significant breakdowns in the system of internal control to the extent that financial losses continue; is no longer just going to be a loose arrangement.”
Makwetu adds: “It will become a recommendation for a period of time, agreed with the auditee. When that time expires, the law requires us to then treat that recommendation as a binding remedial action. If that is not auctioned, we will then have to trigger a process to determine whether we should not issue a certificate of debt.”
