9 November 2012

South Africa: Association of Public Accounts Committees Reacts to the Public Finance Management Act Audit Outcomes 2011/12

press release

The Association of Public Accounts Committees (APAC) today congratulated the Auditor-General of South Africa (AGSA) on its sterling work as the country's supreme audit institution. The Auditor-General, Mr Terence Nombembe presented 2011/12 PFMA audit outcomes to the members of APAC representing all the Public Accounts Committees (SCOPAs) from the nine provincial legislatures and the one at National Assembly

APAC expressed its dismay at the following:

The number of departments and entities who failed to submit their financial statements to the AG has doubled from last year from 3% to 6 %. This is indicative of a blatant disregard to public finance laws and regulations which is due to a lack of recourse for non- compliance and maladministration

The slow improvement in the number of departments and entities moving from the qualified audit opinion zone to the unqualified zone. Such performance shows a lack of commitment on the part of those charged with ensuring sound financial and performance management.

Complacency in the auditees that have achieved unqualified audit opinions with matters of emphasis. APAC is more concerned that some of these auditees have only achieved unqualified audit opinions through the intervention of the Auditor-General. While APAC supports the campaign to achieve clean audits, ensuring clean administration must be the objective which government departments and entities aim to achieve.

If the following key performance areas of focus are anything to go by the objective of attaining clean audit opinions will take longer to achieve.

The quality of submitted financial statements has dropped by 7% from 50% to 43%.

The status of IT controls, supply chain management and human resource management have also remained the same from last year.

However, APAC noted with appreciation the slight improvement of 6% from 55% in 2010/11 to 61% in 2011/12 in the quality of service delivery reporting.

APAC wishes to verbalise its commitment to working closely with the AG together with other stakeholders like National Treasury and other relevant partners in ensuring that the Executive is held accountable to their commitments to the AG. In the coming weeks APAC will engaging on the following activities:

Doing jurisdictional visits in order to check how far each jurisdiction is utilising the APAC Best Practice booklet. We will also be auditing the SCOPA resolutions in order to check whether the quality of resolutions was in any way affecting lack of implementation by departments and entities.

APAC will conduct an assessment of the extent of implementation of SCOPA resolutions at various jurisdictions. On the basis of the findings of this assessment, APAC will be meeting the Executive at the various jurisdictions so as to understand the reasons behind the culture of lack of implementation of SCOPA resolutions and encourage compliance with SCOPA resolutions.

APAC will also lobby the Speakers Forum to see possibilities of legislature and Parliament can accommodate quarterly seatings where the Executive (Ministers and MECs) can offer report backs on the implementation of their commitments to the AG and SCOPA resolutions.

APAC jurisdictions are also encouraged to form provincial Municipal Public Accounts Committee (MPAC) Forums wherein the SCOPA and the MPAC Chairs can find a place where they can find solutions to their challenges.

APAC will also be engaging with National Treasury, CoGTA and DPSA in order to understand why there seems to be a lack of application of measures in the PFMA,

Municipal Finance Management Act (MFMA) and PSA in ensuring that those that deliberately flout PFMA, MFMA and PSA prescriptions seem to go unnoticed. In this engagement APAC will also try to understand the reasons behind the repetitive negative findings on Supply Chain Management irregularities and civil servants who continue to do business with state departments.

APAC will continue to engage the AG and other strategic partners with regard to finding solutions to the issues that seem to impede the attainment of the clean audit opinions.

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