The office of the Auditor-General has noted improvement in financial reporting by some government departments since the AG’s powers were extended to include the process of Material Irregularity (MI).
The MI process followed a unanimous decision by Parliament to amend the Public Audit Act in 2019.
According to Auditor-General Tsakani Maluleke, the issuance of an MI generally means that the risk of a material financial loss, misuse or loss of public resources or substantial harm to a public sector institution has been identified.
Last year the office of the AG identified MI’s amounting to R12 billion in financial losses.
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Delivering a virtual presentation to Parliament’s Standing Committee of the Auditor-General, Maluleke said: “Procurement and payment remains one of the biggest causes of MI’s, where we see that non-compliance lead to overpricing of goods and services, or that suppliers that are appointed are not able to deliver. And often it’s those suppliers that are appointed in a manner that’s inconsistent with the rules that are set by the National Treasury.
“We’ve seen instances where there’re payments made to suppliers and service providers, where the quality of what they delivered is not up to scratch or they’re payments to beneficiaries that should not be paid through particular schemes.”