The Auditor-General Kimi Makwetu has painted a grim picture of the state of finances in the Eastern Cape.
Releasing his audit report for the 2014 / 2015 financial year on Wednesday, Makwetu called on the province's political leadership to set the tone by dealing decisively with those responsible for non-compliance with legislation and the prescripts of supply chain management in particular.
He said while irregular expenditure in the Eastern Cape fell from R2.4bn in the last book-year it was still unacceptably high at R1.43bn in the year under review.
"The supply chain management transgressions account for 94% of the irregular expenditure reported on in the province. These transgressions need urgent leadership attention if this type of expenditure is to be eliminated," Makwetu said.
The Auditor General said "the challenge remains for the province to build a public service characterised by transparent financial and performance reporting. This should be led by accounting officers with the support of all governance structures. The accounting officers must appreciate and lead with ethical and professional behaviour, showing zero tolerance towards deliberate internal control breaches and deviation from applicable legislation."
Makwetu went on to say that provincial role players have undertaken to implement processes that enforce accountability, enhance compliance with legislation and improve the quality and credibility of in-year reporting and monitoring. "If enforced, this will create a foundation for the province to move forward," Makwetu said.
Meanwhile, the errant Eastern Cape Department continue to be Health, Education and Roads and Public Works.
The Auditor-General says while they account for around R50bn or 77% of the provincial budget, the three were once again unable to report transparently on how they had used the money allocated to them.
Makwetu says all these departments received qualified audit outcomes and had findings on the reliability of their reporting on actual performance contained in their annual performance reports.
The AG said the three Departments were also responsible for incurring 84% of the irregular expenditure reported by the province.
"Seventy-seven per cent (77%) or R50 billion of the provincial budget relates to Education, Health and Roads and Public Works, which were once again unable to report transparently on how they had used the money allocated to them," Makwetu said.
"All these departments received qualified audit outcomes and had findings on the reliability of their reporting on actual performance contained in their annual performance reports. They also had numerous findings on non-compliance with legislation, including legislation applicable to supply chain management.
"The province achieved a net improvement of one audit outcome during the year under review, recording four improvements and three regressions. While it is encouraging to note that three of the four improvements relate to auditees that progressed to the ‘unqualified with no findings’ category, it is concerning that only one of the four auditees with clean audits in the prior year managed to sustain this outcome," said Makwetu.
