Accounting officers who vacated their essential government positions amid the investigations by the Auditor-General into material irregularities were slowing down progress meant to discipline those implicated in wrongdoing.These officials included directors-general, heads of departments, municipal managers and CEOs.
This was revealed by Auditor-General Tsakani Maluleke in Pretoria on Wednesday after she tabled her office’s first real-time audit report on the use of relief funds meant for flood-ravaged areas of KwaZulu-Natal and the Eastern Cape before the ad hoc joint committee on flood disaster relief and recovery.
Material irregularities are defined in the amended Public Audit Act as fraud, theft, breach of a fiduciary duty, or noncompliance with or contravention of the law that could result in a material loss.
The amended act came into effect on April 1 2019 and gave the Auditor-General new powers to investigate matters relating to financial loss and possible substantial financial harm to departments, municipalities and state entities.
Culprits, if found guilty, could be issued with a certificate of debt to pay back the money and possibly have their cases referred for criminal prosecution.
Generally, Maluleke said, they had received mixed responses from authorities to their material irregularity notices.
“Some accounting officers really do respond well to material irregularity notifications and then they take the action that is required. We also see that, in the context of real-time audits we conducted now, there’s greater acceptance of findings and greater commitment to implementing the recommendations. At least there’s responsiveness coming into the system.
As long as there was instability, she explained, government institutions would not operate properly and discipline those implicated.
“Therefore, even the responsiveness to our findings and our material irregularity is not there, because somebody moves long before they do what is required.
“Our experience is that, when somebody moves on, we have to start from scratch because you have to give the new person a fair opportunity to acquaint themselves with the matter and to act.
“It slows down the impact of what is a very good instrument to help with strengthening accountability in government.”
Maluleke said they had been disappointed that similar findings, which they had made in their Covid-19 audits, had resurfaced.
These Covid-19 audits included deficiencies in the procurement and contract management processes.
“We would have expected that the findings, the recommendations and even the commitments made when we did those audits were actually implemented,” she said. She added that similar findings relating to the slow provision of water tanks had also been made in the latest audit.
“The same findings that we issued before show up. What then happens is that value for money is compromised and also the ability to deliver services the way that we intended is compromised. Our sense is that we’ve got to get public institutions running [in a] way that is responsive and responsible.”
POLITICIANS, OFFICIALS’ FAILURE
Asked if the failure to implement findings was deliberate, Maluleke said they did not necessarily audit on intention.
But she said they could only conclude, based on what they had found, that their previous findings had not been attended to.
“Accounting officers are appointed as stewards of our public institutions. Their responsibility and authority levels are clearly set out in the legislation and their key part of the design of the public finance management processes in the country. There is a responsibility for the executive authority [political leadership] to monitor, to supervise and to act when the accounting officer does not act on their responsibilities.
“Together, accounting officers and executive authorities are appointed and elected stewards of our public institutions.
“We’ve got to look at them to strengthen, to protect, to maintain and to push towards delivery on all the public institutions that they are responsible for,” she said.
Maluleke said their real-time audits were done on a continuous basis to report quickly to empower accounting officers and executive authorities to act.
These reports, she hoped, would allow accounting officers to implement corrective actions.
She said executive authorities needed to monitor officials, and Parliament should conduct its oversight role to drive accountability.
Maluleke said they were planning to conduct the Eastern Cape part of the audit while similar work would also continue in KwaZulu-Natal.
“The work is continuing. This was just the first part of the report, to say this is what we are seeing so far [up until the end of July].”
According to the Auditor-General’s report, 356 schools were damaged in KwaZulu-Natal and the provincial department estimated repairs, which were planned to commence this month and be completed in March, would cost R235.38 million.
“Some schools were damaged so severely that mobile units [classrooms and kitchens] had to be provided as an interim measure to enable the continuity of education and ensure the safety of learners and staff.
The report states:
The cost of a mobile classroom in line with the specifications set by the department was R249 440, and could accommodate 40 pupils. The mobile kitchens cost R187 130 each. The estimated cost to deliver the required mobile units totalled R18.83 million.
“Although there was a quick turnaround time in preparing the needs assessment, the temporary solution of 13 mobile classrooms did not address the need at one of the five schools selected for auditing [Brettonwood High School],” the report reads.
The report further stated that the department had determined that 13 mobile classrooms, which could accommodate 520 pupils, would be required for the school, because 13 classrooms had been damaged in the floods.
“Four of the 13 mobile units installed and reported as complete were not in use on May 27 during our site inspection. Four of the units were constructed on the very same ground previously submerged by floods and two of the four units had to be vacated due to heavy rains on May 21 and 22.
“The construction of the remaining nine mobile classrooms was therefore placed on hold while the department investigated the availability of suitable land on the school premises not prone to flooding,” the report reads in part.
The report also found that some contracts had been awarded to three different suppliers with the same director, pointing to possible bid rigging.
“Awards were also made to contractors of which the directors are government employees or have business partners employed by the state. If this had not been adequately declared, the procurement process was flawed or there could even have been undue influence,” the report reads.
Some contractors were appointed despite the fact that they had not done work for national and provincial departments during the past two financial years, which could be an indicator of inexperience.
In part, the report said some of the appointed contractors were also not on the supplier database and had not done work in the region before, which included newly registered shelf companies.