AG beef-up long overdue, former employee says


Cape Town – If anyone knows how badly the office of the auditor general needs an urgent adjustment to its powers to arrest the decline of governance at state departments and entities, it would be a former employee of the Chapter 9 institution.

Eric Smith, an auditor and former official at the office of the AG, said while there are some risks in giving the office of the auditor general more responsibilities, they pale in comparison to the financial, operational and environmental risks South Africa faces if mismanagement of state entities continues.

In November last year Auditor General Kimi Makwetu found that irregular expenditure across the state was as high as R45.6bn. Despite these violations of the Public Finance Management Act, no one has ever faced the appropriate sanctions of incarceration or a fine.

Parliament’s standing committee on the auditor general continued with its public hearings on amendments to the Public Audit Act. The amendments are aimed at giving the auditor general power to enforce recommendations emanating from its audit reports into departments and entities.

Departments and entities have, at best, ignored the recommendations of the AG’s audit reports and, at worst, contested the audit reports. However, instances where auditees comply with recommendations and agree with undesirable audit outcomes are few and far between.

Critical role in covering governance gaps

Smith told the committee that South Africa’s regulatory regime does not have the capacity to monitor and enforce environmental compliance within state organs. He said the AG could play a critical role in covering governance gaps at all three spheres of government.

“The AG is perfectly placed, through yearly regularity audits and follow-ups at all organs of state, to assess or sensitise overall environmental management for further action and improvement, giving the office room to conduct value-adding reporting,” said Smith.

The committee last week debated whether the office of the auditor general would be the appropriate body to recover funds it finds have been misspent by government departments and entities. They also explored the possibility of a mediation mechanism if accounting officers contest the AG’s findings.

Legal adviser to the committee Xolisile Mgxaji said inputs received by the committee ahead of its public hearings on amendments to the bill include dispute resolution mechanisms when accounting officers wish to contest the AG’s findings.

The AG currently does not have a debt collection mandate and this would bog the institution down with an additional burden, thus distracting it from its core function, he said. He also mentioned recommendations that recovered funds be transferred the National Revenue Fund and reallocated by the National Treasury.

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