National departments are subject to annual auditing by the Auditor-General of South Africa (AGSA), where an audit opinion is given based on a department's financial statements. In forming an audit opinion, the AGSA examines if a department meets its predetermined objectives and if its financial statements comply with legislation.
Interesting facts that emerged this year:
- No national department received an adverse or disclaimed audit opinion for the second year running
- The Department of Energy regressed from a clean audit opinion to a qualified opinion
- The Departments of Communications, DPME, Social Development, Sports and Recreation and Tourism maintained clean audits
- The Departments of Correctional Services, Justice, Police and Water and Sanitation all regressed from unqualified opinions to qualified audit opinions this financial year
AGSA communicate key messages to Parliament about the root causes for audit failures or stagnation i.e. not improving and achieving a clean audit. These root causes are:
- slow response from senior management to implement action plans to remedy audit findings,
- lack of consequences for poor performance and transgressions,
- instability caused by vacancies in key positions.
*At the time of this publication audits for the Departments of Environmental Affairs and Transport were still outstanding.
See infographic below on the 2016/17 national department audit outcomes: