AG concerned about increase in 'not credible' financial reports

On Wednesday, she briefed Parliament on the audit outcomes of the national and provincial governments for the 2022/23 financial year.

Maluleke told MPs that in spite of the general improvement in audit outcomes, the trend is of concern to her office.

"We also find it concerning that the performance plans of some auditees excluded performance indicators that measure their performance on their core mandated functions, including their contribution to Medium Term Strategic Framework targets.

"Our audit work incorporated numerous site visits to inspect the progress on and quality of infrastructure projects. We identified deficiencies on over 80% of the 137 projects we visited.

"We have found that, all too often, infrastructure delivery projects are delayed, cost more than planned, or the work done is of poor quality."

She adds that when the government is not careful with its spending practices, it reduces the already limited funds available.

"The main reasons for the continuing financial losses and waste we observed, especially at high-impact auditees, were widespread poor payment practices, uncompetitive and uneconomical procurement practices, limited value and benefit for money spent, poorly managed government properties and accommodation leases, and weaknesses in project management.

"The funds government budgets for service delivery activities are reduced by claims made against departments, and by auditees overspending their budgets and being in poor financial health

"Ailing institutions, such as the state-owned enterprises, place further pressure on the government by needing bailouts and through potential future obligations as a result of guarantees.

"When auditees, especially high-impact auditees, do not properly manage their performance, finances and infrastructure, it directly affects the delivery of key government programmes that are intended to improve the lives of South Africans and to alleviate hardships stemming from tough economic conditions and poverty. Wasted money and resources means reduced funding for service delivery programmes and, eventually, a greater burden on taxpayers."

Maluleke said there is a need to urgently install a culture of accountability and improved service delivery.

"Based on the insights from our work on service delivery planning and reporting, infrastructure and financial performance, we identified three main weaknesses that hold back progress: A culture of no accountability and consequences, Ineffective resource management, Inadequate intergovernmental planning, coordination and support.

"These root causes are very similar to what we have highlighted consistently over the administrative term. Improved service delivery and responsible use of the limited funds available will only be possible when we have capable, cooperative, accountable and responsive institutions that deliver on their mandates."

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