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Slight improvement in Limpopo’s financial statements


The Auditor-General’s (AG) 2014/15 provincial financial management reports presented to the Legislature last week reflects a slight improvement.
A movement from 40% (2013/14) to
61% of auditees with unqualified reports with findings and a subsequent decrease from 43% (2013\14) to 18% of auditees with qualified reports with findings was reported.
The Office of the Premier is the only department boasting a clean audit for the 2014/15 financial year.
Eugene Zungu, National Leader of the Audit Services in the Office of the Auditor-General of South Africa last week presented the report to the Legislature during a provincial road show held at The Ranch Resort.
A large percentage of auditees, 82%, still showed significant non-compliance with applicable financial legislation and 71 % of auditees were not complying with supply chain prescripts, according to the AG’s report.
Only 10% of submitted financial statements were reported to be good quality, while 90% of auditees reports needed intervention. According to Zungu six departments ended up with unqualified reports only after misstatements have been corrected during the audit process. “This is not sustainable,” he said. “Only 35% of reports were useful and reliable, he said, a regression from the previous financial year.” No consequences for poor quality work or other transgressions were still a problem in 62% of auditees’ cases. There was, however, a slight improvement regarding this aspect in the province.
Two entities, Gateway Airports Authority Limited and the Limpopo Economic Development Agency did not submit financial statements for auditing.
The Department of Education was responsible for 100 % of the province’s unauthorised expenditure of R5 million. The 2013/14 financial year’s unauthorised expenditure amounted to R16 million. Fruitless and wasteful expenditure in the province in 2014/15 amounted to R139 million, with the departments of Health (R43 million) and Education (R73 million) responsible for the bulk of the amount. The Department of Sport, Arts and Culture, having the smallest budget, also contributed a lot to irregular expenditure. This was ascribed to lack of internal controls within the department. Fruitless and wasteful expenditure for the 2013\14 financial year amounted to R212 million.
The AG’s office was not happy with irregular expenditure incurred in the province amounting to R2, 103 billion (R2 103 million) against R3, 567 billion (R 3 567 million) the previous year. The departments of Education with R994 million, Health with R345 million and the Roads Agency Limpopo with R447 million were the biggest contributors to irregular expenditure. The amount included previous years’ amounts which have not been resolved or condoned. Possible irregular expenditure is under investigation in 83% of auditees. Irregular expenditure for 2013/4 was R212 million.
Zungu concluded by urging departments to take the AG’s findings seriously and address them to see sustained improvement in the province. He advised departments on what should be done and what the risk factors were. He cautioned that strategic plans and pre-determined objectives and key performance areas are not necessarily included in annual planning and departments may get a clean audit while service delivery may not be good, and that a clean audit is just a sign that a department has reported accurately on deliverables promised.

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Photo: Limpopo Auditor-General, Nthanyi Dhumazi and Eugene Zungu, National Leader: Audit services from the office of the Auditor-General of South Africa.