Parliament, Friday, 8 March2024 – The Standing Committee on Auditor-General was today briefed by the Auditor-General (AG), Ms Tsakani Maluleke, about material irregularities in provincial and national governments in relation to the Public Finance Management Act (PFMA).
In her presentation to the committee Ms Maluleke covered material irregularities during the PFMA cycle from April 2019 till now, a period since the implementation of the amended Public Audit Act.
She defined material irregularity (MI) 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.
She said the objectives of the process are to instill a culture of accountability, improve the protection of resources, enhance public sector performance and encourage an ethical culture, strengthen public sector institutions to better serve the people of South Africa
The AG told the committee that MI could be resolved only when all possible steps have been taken to recover financial losses or address harm caused, effect consequences for officials and third parties involved and prevent any further losses and harm, also through improved internal controls.
The committee also heard that investing in preventative measures to avoid MIs is more effective than dealing with the consequences when they occur and that internal audit units and audit committees can be of great value to assess risks, recommend good preventative controls and monitor implementation.
She said greater impact can be made through swift and timely action taken by accounting officers and authorities to respond to MIs and implement preventative controls to improve the overall control environment, as well as regular monitoring of progress in implementing planned actions by executive authorities and oversight structures.
She also advised that parliamentary committees responsible for public bodies should request regular reports on the status of investigations and must pursue any unreasonable delays.
The committee welcomed the AG’s presentation and said it was clear, precise, especially useful and empowering to the Members of Parliament.
Committee chairperson Mr Sakhumzi Somyo said it was the duty of the committee to monitor the implementation of the reviewed Public Audit Act, as well as advocate for good outcomes and ensure that a culture of accountability was instilled in the public service.
“Auditor General South Africa has crafted a way which has been modelled around accountability ecosystem and which has enabled various entities and their stakeholders to instill a culture of accountability,
“The AG has also shown how those who are supposed to account must keep the balance between accountability and performance systems. The Independence of the AG must not only be on paper but on actual action, our responsibility is to protect, advance and guarantee the life of that office,”said Mr Somyo.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON AUDITOR-GENERAL, MR SAKHUMZI SOMYO.
For media enquiries or interviews with the committee Chairperson, please contact:
Name: Sakhile Mokoena
Cell: 081 705 2130
Email:smokoena@parliament.gov.za
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