Auditor-General (AG) Tsakani Maluleke has reported “an overall improvement” in the national and provincial government audit outcomes for the 2022/23 financial year.

“The number of clean audits has increased quite significantly, and I think that’s quite important,” Maluleke said while tabling the 2022/23 general report for national and provincial departments, their entities and legislatures to Parliament’s standing committee on the AG on Wednesday.

Overall, the audit outcomes of both departments and public entities improved and more auditees improved their audit outcomes each year of the administrative term than regressed. A total of 37 auditees (9%) showed a net improvement in their audit outcomes in 2022/23 — the biggest movement over the four-year period, according to Maluleke’s report.

Provincial governments showed a net improvement of 44 (27%). The national government showed a net improvement of 34 (15%).

Audit outcomes for all auditees. (Image: AGSA 2022/23 general report for national and provincial departments, their entities and legislatures)

National audit outcomes

• Of the total 418 auditees, the 147 auditees (35%) that achieved clean audits in 2022/23 managed 16% of the R3.10-trillion expenditure budget in national and provincial government, according to Maluleke’s report. (In 2021/22, 30% of the auditees had a clean audit, compared with 27.7% in 2020/21.) Additionally, the 162 auditees (39%) that received unqualified audit opinions with findings managed 48% of the budget.
• Twenty-two national auditees sustained clean audit status for five or more consecutive years, including the Department of Science and Innovation, Department of Traditional Affairs, Parliament, Competition Commission, Council for Scientific and Industrial Research, and the South African Local Government Association.

Provincial audit outcomes

The provincial audit outcomes have shown a gradual upward trend over the past four years.

• The Western Cape was the best-performing province, with 18 clean audits and three unqualified audits with findings.
• The Eastern Cape is trailing the Western Cape for the top spot with 12 clean audits.
• The biggest improvements were in North West (9), KwaZulu-Natal (9) and the Eastern Cape (8).

Provincial audit outcomes and percentage of provincial budget (Image: AGSA 2022/23 general report for national and provincial departments, their entities and legislatures)

Worst performers — service delivery and SOEs

In her report, the AG specifically focused on auditees contributing to the “delivery of health services, skills development and employment, infrastructure development, safety and security, water and sanitation, energy as well as environmental and financial sustainability.” She refers to these as “high-impact auditees”, which are responsible for 85% of the expenditure budget.

• According to the AG report, 38 high-impact auditees (20%) received clean audits.
• Fifteen high-impact auditees had outstanding audits.
• Out of the 15 state-owned enterprises (SEOs) the AG audits, only one received a clean audit: Development Bank of Southern Africa.
• Three SEOs audited by the AG were outstanding: Alexkor, Denel and South African Airways (SAA).
• The AG said there was a “net regression” in the audit outcomes of the 12 SEOs with completed audits that it audited.
• The private sector audits four state-owned enterprises, including Eskom, which had audits that were still outstanding.

Audit opinion on performance reports per sector. (Image: AGSA 2022/23 general report for national and provincial departments, their entities and legislatures)

Audit outcomes – state-owned enterprises. (Image: AGSA 2022/23 general report for national and provincial departments, their entities and legislatures)

Unauthorised and irregular expenditure 

• In 2022/23, unauthorised expenditure at government departments totalled R4.6-billion.
• Irregular expenditure disclosed to the AGSA in 2022/23 totalled R63.4-billion, but Maluleke warns this number is likely to be incomplete, as auditees no longer have to include irregular expenditure incurred in their financial statements.

Irregular expenditure in the provinces (Image: AGSA 2022/23 general report for national and provincial departments, their entities and legislatures)

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