By In her report, Maluleke applauded the Office of the Premier and the Department of Cooperative Governance and Traditional Affairs (CoGTA) for the hardword they put in to ensure transparent reporting.
The previous administration in the Free State Province has proven to be effective; this is according to the Auditor-General’s (AG) 2023/24 PFMA General report which showed that the province has made eight improvements and one regression.
The Free State Province, led by the former Premier and now Speaker of Legislature Mr Mxolisi Dukwana; came in second after the Northern Cape in overall net improvements; the Northern Cape achieved the biggest net improvement of 56% followed by the Free State at 44%.
The province has been notorious over the years for non-compliance and unaccountability; the Auditor-General Ms Tsakani Maluleke says they have encouraged all role-players in the accountability ecosystem to work together to address shortcomings and proactively deal with the challenges so that the lived realities of the people in the province would improve.
The AG urged the leadership to act decisively and instil a greater sense of urgency to improve the control environment; reduce material findings; promote credible performance reporting; investigate unauthorised, irregular, and fruitless and wasteful expenditure; address infrastructure challenges; and drive a sustainable change at auditees.
Following the AG’s call, investigations into unauthorised, irregular, and fruitless and wasteful expenditure resulted in an overall reduction in the unauthorised and irregular expenditure closing balances, and improvements in the control environment led to fewer qualification areas.
“Overall, audit outcomes have improved over the administrative term, with eight improvements and one regression. This was mainly because of administrative leadership’s response in addressing prioryear material misstatements.
While this positive trend is encouraging, most of the auditees continue to submit poor-quality financial statements and have become complacent, with their audit outcomes remaining unchanged at either unqualified opinions with findings or qualified opinions. This is largely due to management’s slow response in addressing prior-year matters, along with a lack of concerted effort to ensure compliance with legislation and credible performance reporting,” said Maluleke.
In her report, Maluleke applauded the Office of the Premier and the Department of Cooperative Governance and Traditional Affairs (CoGTA) for the hardword they put in to ensure transparent reporting.
The AG’s report shows that; over the administrative term, the Free State Development Corporation has shown gradual improvement: from a disclaimed audit opinion in 2021-22 to an adverse opinion last year and finally to a qualified opinion in 2023-24.
The provincial human settlements department improved from a qualified opinion to an unqualified opinion with findings. To sustain this improvement, the department must proactively implement financial disciplines, rather than solely relying on the audit process to correct identified material misstatements.
The provincial community, safety, roads and transport department regressed from an unqualified opinion with findings to a qualified opinion, as management did not address our prior-year recommendations timeously.
“Since 2019, we have notified accounting officers of 24 material irregularities with a combined estimated financial loss of R422,47 million. This includes three notifications we issued in 2023-24 for which we have already received responses from the accounting officers. Two of these three material irregularities relate to inadequate revenue management at the provincial sport, arts, culture and recreation department.
The remaining irregularity relates to the provincial economic, small business development, tourism and environmental affairs department not implementing effective internal controls to recover transfer payments not used in accordance with the transfer payment agreement,” said AG Maluleke.
“Accounting officers and an accounting authority have taken appropriate action to resolve 13 of the 24 material irregularities – including those relating to overpayments on housing projects and payments for goods not received. In some instances, contracts were cancelled before further losses were incurred. They have also prevented financial losses of R78,65 million, have recovered R0,67 million from third parties, and are busy recovering a further R79,26 million,” she continued.
