More powers paying off for auditor-general

• Published date: 13 March 2023
• Publication title: Business Day (Johannesburg, South Africa)

Personal liability for financial losses improves integrity Parliamentary CorrespondentThe process that can ultimately result in accounting officers being held personally liable for financial losses due to irregularities in their departments has improved the culture of accountability, integrity, transparency and performance in the public sector, says auditor-general Tsakani Maluleke

The personal liability of accounting officers is the ultimate step of the material irregularity process, which Maluleke says has given the auditor-general "bite" and is acting as a deterrent to wrongdoing. Accounting officers have been responsive and are taking the recommended actions.

Provision for material irregularities and enhanced powers for the auditor-general is contained in amendments to the Public Audit Act, which took effect in April 2019. The amendments were introduced in the context of pervasive mismanagement and leakage of public funds.

Maluleke was reporting to parliament’s standing committee on the auditor-general on Friday about progress in the implementation of the material irregularities process.

In terms of the law the auditor-general can refer a suspected material irregularity to a public body such as the Hawks or the Special Investigating Unit for investigation, and require the accounting authority to act on the auditor-general’s recommendations within a stipulated time. If these recommendations have not been implemented by the stipulated date, the auditor-general may take binding remedial action and if the irregularity involves a financial loss issue a directive to the accounting officer or authority to quantify and recover the loss from the responsible person.

If the accounting officer fails to implement this remedial action, the auditor-general can issue a certificate of debt in the name of the relevant accounting officer or accounting authority.

Maluleke told MPs that of the 179 material irregularities on noncompliance and fraud identified until end 2021/2022 in national and provincial government, 169 resulted in material financial loss estimated at R12bn, nine led to substantial harm to public sector institutions...