Departments and their entities 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, AGSA determines the financial health of departments and if its performance met its predetermined objectives and if the financial statements comply with legislation.
Interesting facts that emerged:
▪ No national department received an adverse or disclaimer audit opinion, compared to one last year.
▪ The Departments of Water and Sanitation and International Relations and Cooperation were unable to better their 2013/14 qualified audit opinions.
▪ The Department of Home Affairs progressed from a disclaimer to a qualified opinion.
▪ The Departments of Energy, Trade and Industry and Science and Technology progressed from ‘unqualified with findings’ in 2013/14 to clean audits in 2014/15.
AGSA really excelled this year in communicating key messages to Parliament about the root causes for audit failures or for stagnation i.e. not improving and achieving a clean audit.
These root causes were:
▪ 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.
Also a new feature introduced this year by AGSA was that MPs were told about the level of commitment each Minister had shown towards cleaning up the audit findings. These clear messages about difficult financial matters should help in improving oversight over department performance.
For the 2012/13 and 2014/15 departmental audit outcomes infographic, click here.
The following infographic details the audit outcomes for all national departments for the 2013/14 and 2014/15 financial years: