Parliament, Wednesday, 16 October 2024 – The Portfolio Committee on Agriculture and the Portfolio Committee on Land Reform and Rural Development yesterday expressed their displeasure with the qualified audit opinion received by the majority of the entities within the Department of Agriculture, Land Reform and Rural Development’s portfolio in the 2023/2024 financial year.
The committees heard from the Office of the Auditor-General (AG) that the audit outcomes for the portfolio regressed slightly in the year under review and there has been minimal progress in addressing internal control deficiencies across the department’s entities. The audit results presented excluded the Ingonyama Trust. AG’s Office indicated that the trust’s audit results were signed off on Monday and will therefore be presented at a later stage.
The committees held a joint meeting for the briefing on the 2023/2024 annual reports from the AG and the Department of Agriculture, Land Reform and Rural Development. The meeting was also attended by the Minister of Agriculture, Mr John Steenhuisen, and the Deputy Minister, Ms Nokuzola Capa.
The committees heard the audit outcomes for the majority of portfolio’s entities remained stagnant, largely because they have not addressed previous findings effectively and implementation of action plans is often inconsistent.
The AG’s Office said key factors hindering the portfolio from achieving a clean audit or unqualified opinion include the submission of annual financial statements containing material misstatements, and a lack of credibility and accuracy in the reported performance information.
The committees learnt that there is a culture in the agriculture, land reform and rural development sector of failure to achieve clean audit outcomes. A significant contributing factor to this is the lack of leadership oversight, which is deeply embedded within the department and its entities. According to the AG, the portfolio has challenges relating to the failure of both management and the accounting authority to effectively review the financial statements before the audit.
The committees heard that regular financial reports have not been adequately prepared or supported by reliable information, which compromises the integrity of the financial data presented.
The AG informed the committees that six of the auditees continue to exhibit material non-compliance, underscoring the need for more stringent accountability measures and follow-through on identified deficiencies. The AG emphasised that without effective consequence management, there is a likelihood of repeat findings and the persistence of non-compliance.
The committees supported the AG’s call for a robust approach to internal controls, greater accountability in consequence management, and a more decisive implementation of audit recommendations to foster sustained compliance and operational effectiveness across departmental entities.
The committees welcomed the AG’s recommendation on how the matters affecting these entities can be resolved. The recommendation included, among other things, that the accounting authorities must establish disciplined financial structures grounded in robust accounting and financial management principles.
The AG’s Office further recommended that the committees should critically evaluate the annual performance plans to ensure alignment with the entities’ service delivery mandate. Furthermore, the AG’s Office recommended that the accounting officers and management should strengthen the annual financial statement review process to improve the quality and credibility of these statements.
The department achieved an unqualified audit opinion with findings and 30 of 37 annual targets were met. The committees were unhappy to hear that one of the audit findings related to the late payments of invoices and requested a detailed report on how this matter will be resolved.
Mr Steenhuisen told the committees that the Department of Agriculture will be embarking on a strategic planning session for management next week. He indicated that many of the issues raised today will be discussed “in terms of how to improve audit outcomes”.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON AGRICULTURE, MS DINA PULE, AND THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON LAND REFORM AND RURAL DEVELOPMENT, MR LAWRENCE MCWANGO.
For media enquiries or interviews with the chairpersons, please contact the committee’s Media Officer:
Name: Malentsoe Magwagwa (Ms)
Cell: 081 716 5824
Email: mmagwagwa@parliament.gov.za
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