DoD, Home Affairs & prisons among worst performers in financial stakes

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The departments of Defence, Home Affairs and Correctional Services are among some of the worst performers in the financial stakes, a Democratic Alliance analysis of departmental annual reports and the findings of the Auditor General (AG) finds.

A DA analysis of reports over the last eight years found that of the 271 annual audits conducted by the Auditor-General on the 34 government departments and public entities from April 2001 to March 2009 only 14 produced so-called “clean reports.”

Of the remainder, 81 were “qualified”, received an “adverse opinion” or a “disclaimer”; and 127 reports received an “emphasis of matter/s”.

Entities that receive qualified reports, adverse opinions or a disclaimer from the AG are deemed to be in a state of financial disarray and mismanagement.

Entities that receive a report with an emphasis of matter are deemed to have failed to comply with their agreed programme of action or failed to comply with statutory requirements.

For the financial year ending March 2009, only one out of 34 entities audited – the Department of Science & Technology – received a “clean report”. Nine received an “emphasis of matters” and 12 a “qualified opinion”. The AG raised “other matters” in 12 instances. No department received a “disclaimer of opinion.”

DA public accounts spokesman Mark Steele says audit outcomes “represent the best measure of a department’s ability to carry out its duties”.

He says it is clear from the AG’s findings that many national departments are “grossly underperforming, failing to deliver on their mandate, and wasting significant amounts of public money.”

Steele says a look at eight years of such reports show “that too many government ministers and directors-general are simply unable to properly manage public money.”

He observes that “not every department is problematic”.

Other than the DST, which received a clean report, entities criticised for minor matters were the departments of Education, Environmental Affairs and Tourism, Foreign Affairs, Housing, Minerals and Energy, Public Service and Administration as well as the National Treasury. Steele said these had to be commended, as well as the Government Communications and Information Systems, the Public Service Commission, the South African Management Development Institute (PALAMA) and Stats SA.

The worst-performing departments were Correctional Services and Defence with eight qualified opinions in eight years, Health with seven, Home Affairs with five qualified opinions and three disclaimers of opinion in eight years, Labour with six qualified opinions, Land Affairs and Public Works with four qualified opinions in the last four years, Sport and Recreation with three qualified opinions in the last three years, the Police ministry’s Independent Complaints Directorate with three consecutive qualified opinions and the Presidency with two consecutive qualified opinion.

Damning findings from various departments include the unauthorised expenditure of R483 million by the Department of Correctional Services on salaries and other conditions of service “for the financial years 2007/08 to 2010/2011”; the inability of auditors to check revenue amounting to R356 million at Home Affairs “due to the lack of an audit trail and serious inefficiency of the accounting officer (Director- General)” and the irregular expenditure of R198.2 million at the same department.

The AG noted the Department of Defence has received ten successive qualified audit opinions, with R100 million of irregular expenditure in the latest financial year in addition to R4.4 million of fruitless and wasteful expenditure.

Steele says the DA proposes that any government department that receives three disclaimed, qualified or adverse audit opinions in a row should have their minister and director general removed from any further role in government.



“If the past eight years are an illustration of government’s commitment [to fiscal rectitude], then financial mismanagement and administrative incompetence seems now to be accepted as common practice and consequences do not follow.”