18 October 2007
Nelspruit: Auditor-General (AG) Terence Nombembe today briefed the
Mpumalanga legislature on the province's audit outcomes and trends for the
2006/07 financial year and raised his concern over the level of financial
management in government departments and public entities.
The purpose of the AG's analysis, a comprehensive assessment of the state of
financial and performance information in the public sector, is to provide an
overview of the audit outcomes at provincial department and public entity
level. Nombembe has embarked on a countrywide road show presenting his overview
of the national and provincial government audits to the various legislatures
and the national Parliament.
The emphasis will be on what underpins the audit results of government
departments in the 2006/07 financial years. According to the information
available at the time of our analysis, the Mpumalanga government comprised of
13 departments and seven public entities.
Overview of audit opinions
Of the 13 provincial departments, only one (eight percent) department
received an unqualified financial opinion without significant concerns on any
other matters. Six (46%) department received a qualified audit opinion, while
the reports of another six (46%) departments that received an unqualified
financial opinion had concerns raised on other matters.
The provincial departments with financial qualifications are Economic
Development and Planning, Education, Health and Social Services: Health
Component, Health and Social Services: Social Component, Local Government and
Housing and Public Works. On the other hand the six (46%) departments that were
unqualified financially, but had concerns in areas of internal control,
governance and legislative non-compliance are Office of the Premier, Provincial
Legislature, Agriculture and Land Administration, Culture, Sports and
Recreation, Road and Transport, and Safety and Security.
The one department that had neither financial qualifications nor significant
other matters (clean unqualified opinion) is Finance. Of the seven public
entities included in our analysis, two (29%) public entities received a
qualified audit opinion, while one (14%) received a disclaimer. Four (57%)
other pubic entities that received an unqualified financial opinion had
concerns raised on other matters.
The public entities with financial qualifications are the Agricultural
Development Corporation and the Economic Growth Agency. A disclaimer of the
financial audit opinion was issued on the Tourism and Parks Agency. On the
other hand, the four (57%) public entities that were unqualified financially,
but had concerns in areas of internal control, governance and legislative
non-compliance are the Gambling Board; the Regional Training Trust; the Housing
Finance Company and the Housing Development Fund.
Says Nombembe: "We have tailor-made our audit reports and systems to track
and identify root causes of problem areas in all departments. We also make
recommendations of how departments can improve their governance and financial
control systems. We have embarked on these legislature briefings with the
belief that our analyses will help guide both the legislators and management to
improve their internal control weaknesses.
Most of these problems are basic internal control compliance issues that
require effective monitoring by the leadership so that they could be solved
immediately, while management is sorting out structural internal control issues
that seem to be confined provincially to asset management and a few departments
that have challenges beyond asset management.
"The critical message we are leaving with the legislators and the executive
during our briefings is that it is possible to obtain an unqualified audit
report if the basics in control systems are in place and constantly monitored
by the leadership." Nombembe will present his overall findings on local
government during May 2008.
Enquiries:
Africa Boso
Media Liaison: Auditor-General of South Africa
Tel: 012 426 8273
Cell: 082 889 9527
E-mail: africab@agsa.co.za
Issued by: Auditor-General of South Africa
18 October 2007
