Parliamentarians want the auditor-general to show her teeth by using her expanded powers against the accounting officials who fail to act on remedial actions and incur repeat findings.
This comes after the Office of the Auditor-General made a presentation to the portfolio committee on defence and military veterans on the recent Department of Defence (Dod) and Department of Military Veterans (DMV) audit findings.
Briefing the committee, auditor-general senior manager Eduard Coetzee said the financial statements submitted for auditing by the two departments had not been prepared in accordance with the prescribed financial reporting framework as they contained material misstatements.
Coetzee said both departments received qualified audit opinions.
“The DoD was qualified on completeness of irregular expenditure in 2022-23 and the previous four years and the DMV was qualified on completeness of irregular expenditure in 2022-23,” he said.
Coetzee’s presentation revealed that the departments had a weak internal control environment, an inadequate review of financial statements and supporting schedules, and slow progress in implementing action plans.
According to the presentation, irregular expenditure spiralled from R8.13 billion in 2018-19 to R16.22bn in 2022-23.
He told the MPs there had been delays in completing investigations into irregular expenditure and a lack of effective consequence management.
Coetzee said there were 12 material irregularities and only four had been resolved.
The Secretary for Defence had all the responsibilities of an accounting officer but could not lawfully take disciplinary steps against members under the purview of the chief of the SANDF, and could not lawfully instruct the chief to take those steps.
“This is due to the structure and distribution of power in the Defence Act, and the department’s internal accountability arrangements. This limitation has negatively affected the implementation of consequence management for material irregularities issued to the DoD,” he said.
The ANC’s Thokozile Sokanyile said the report on audit outcomes would help them in their oversight.
Sokanyile said she was concerned that irregular expenditure cases were still being investigated and awaiting condonement. “If they are saying they are investigating, there must be timeframes,” she said.
The UDM’s Thandi Nontenja noted the level of regression by the department and the number of repeat findings that had been highlighted in the report.
“AGSA has an expanded mandate now which gives more power to deal with these things,” she said.
The DA’s Chris Hattingh said the report presented to the committee essentially dealt with repeat findings.
Hattingh said the DoD was the worst department to do business with the private sector and was one of the culprits responsible for late invoice payments.
He said late invoice payments should be classified as material irregularity if they were to be addressed.
Committee chairperson Dakota Legoete said: “If you count irregular expenditure between 2019 and 2023, it comes close to almost R51 billion. It is a cause for concern because as the committee we need to lobby for funds for Defence.”
Cape Times