Parliament, Wednesday, 6 March 2024 – The Portfolio Committee on Cooperative Governance and Traditional Affairs (COGTA) met with the office of the Auditor-General to be briefed on material irregularities in local government yesterday. The briefing included a reflection on the implementation of the extended powers of the office, following amendments to legislation made by Parliament.
The AG’s extended powers seek to promote better accountability, improve the protection of resources, enhance public sector performance and encourage an ethical culture, as well as strengthen public sector institutions to better serve citizens.
Material irregularities (MIs) are defined, in the AG’s presentation to the committee, as any non-compliance with,or contravention of, legislation, fraud, theft or a breach of a fiduciary duty identified during an audit performed under the Public Audit Act that resulted in or is likely to result in a material financial loss, the misuse or loss of a material public resource, or substantial harm to a public sector institution or the general public.
The committee heard that the material irregularities process is making an impact, particularly as a result of responsive accounting officers. The following developments have been reported in local government: R182,75 million in financial loss recovered;R18,85 million in financial loss prevented from taking place; and R310 million in the process of being recovered.
The committee also heard that internal controls improved to prevent recurrence, responsible officials were identified and disciplinary process were completed or are underway, fraud or criminal investigations were instituted, supplier contracts were stopped where money was being lost, and outstanding financial statements have been submitted.
The AG told the committee that it is concerned that irregular expenditure has not been attended to by municipal public accounts committees (MPACs). One of the AG’s recommendations is for municipal councils, MPACs and provincial legislatures to request quarterly reports from accounting officers on the status of their material irregularities.In addition, they should hold accounting officers accountable for any unreasonable delays in resolving the irregularities.
The Deputy Minister of the Department of Cooperative Governance and Traditional Affairs, Prince Zolile Burns-Ncamashe,assured the committee that the department will do everything possible to ensure there is significant improvement in recoveries, record management and all the other matters raised by the AG.
The committee Chairperson, Mr Fikile Xasa, thanked the office of the AG and the department for the engagement,which he said provided committee members with very useful information and answered important questions.
“We appreciate that the work of the AG is yielding some results, especially on non-submission of financial statements and disclaimers. We also noted the issue of the time it takes to conclude investigations and the negative impact of such delays, such as the inability to recover resources because people have moved,” he said.
Mr Xasa also mentioned that he believes accounting officers who failed to deliver on their mandate should face the law. “If accounting officers are not doing what they are supposed to do,the law should take its course. Make examples with such accounting officers who are not doing their work,” he urged.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS, MR FIKILE XASA.
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