Audit outcome shows need for immediate action

By Andrew Louw, MPL, DA Provincial Chairperson in the Northern Cape:

The 2014/15 audit outcomes for the provincial government, released today, shows that immediate action must be taken to clean up the provincial administration and to improve service delivery. While there are some positives, the report from the Auditor-General shows that there has been an overall regression in the province.

Contrary to our hopes and the few highlights, the audit report for

2014/15 is terrible.

Three auditees regressed from clean audits to unqualified audits, including the department of Economic Development & Tourism and the Northern Cape Provincial Treasury. Their strategic priorities include the stimulation of economic growth to ensure job creation, support to municipalities to improve service delivery at grassroots level and ensuring clean provincial administration.

Instead of achieving these goals, the department and Treasury both had findings on non-compliance. It is then no wonder that unemployment is so high, especially among the youth, and that municipalities are dysfunctional!

We are also concerned about the poor management of asset registers. If asset registers are not managed properly, they can become breeding grounds for corruption. Late completion of the fixed asset register at the Northern Cape Fleet Management Trading Entity meant that the audit is still outstanding. This is an unwanted first for the past three financial years.

We welcome the 80% decrease in fruitless and wasteful expenditure. We cannot condone it when government fritters away the money meant for the poor, but we can see from this drastic change that there has been an honest attempt to improve and we appreciate it.

We are, however, alarmed that there is a 20% increase in irregular expenditure, as it indicates that departments are not using their funds for its intended purposes.

It is also a matter of extreme concern that one of the most crucial service delivery departments, namely Health, remains the largest contributor to irregular, fruitless and wasteful expenditure.

Historically, Health has struggled to achieve good audit outcomes and had disclaimer audits from 2003 to 2013. Are we going to see Health reverting to ten years of disclaimers again?

In the past financial year, provincial departments incurred at least

R1.582 billion in unauthorized, irregular, fruitless and wasteful expenditure. The total figure could be higher, as many departments have not disclosed the full amounts of irregular expenditure that they incurred.

Using the R1.582 billion which was lost through mismanagement and maladministration, we could have doubled the funding for the Economic Growth and Development Fund to R72 million. In so doing, we could have doubled the support given to emerging entrepreneurs and SMMEs requiring financial assistance to succeed. We could also have converted the contracts of 1 240 teachers appointed by school governing bodies to departmental posts to a total cost of R360.840 million. We could further have increased access to Early Childhood Development by building 279 classrooms.

To improve emergency services, we could have used R32.194 million to procure 67 emergency medical vehicles. This would be enough to bring the amount of ambulances operating in the Northern Cape in line with the national targets. We could also have built 52 satellite fire stations at a cost of R10.660 million each in the 24 municipalities that still don’t have adequate fire prevention services.

We congratulate the department of Social Development, the department of Environment and Nature Conservation as well as the Northern Cape Tourism Authority with their clean audits. We also congratulate the department of Education for improving from a qualified audit to an unqualified audit. We trust that this improvement will also translate into higher quality education, which will be reflected in improved matric results.

Departments can prepare themselves for a thorough interrogation from the Democratic Alliance when they come to table their annual reports.