What clarity is needed from a new Auditor General
08 September 2020
In a country full of noise about poor governance, with an increased focus on the problem of corruption in Government, South Africa’s new Auditor General (AG) needs to provide clarity on the values that AG office will stand for, writes Cobie van Antwerpen, Head of Public Sector Advisory at BDO in South Africa.
The audit industry at large is still going through a difficult time. Worldwide, there has been an explosion of audit failures in both the public and private sectors.
Now is the time for clarity from the highest audit office in our country.
We call on the AG to:
- provide an anchor that gives clarity to citizens on the status of the financial affairs of our Government. This will help build our trust in our government departments, municipalities and all state-owned and public entities
- show commitment to provide clarity on how the office will deliver on the mandate to provide appropriate oversight on the audits performed at state-owned enterprises
provide clarity around the role they will play in communicating to the executive authorities in a timely way on the critical financial and control matters at hand to assist in building and sustaining public trust in our public sector.
The AG’s term of seven years will allow him or her to change the audit expectations gap to live up to the commitments made to contribute towards better audit outcomes. Although independent in its audits, the AG has contributed significantly towards enhancing the accountability and reporting by accounting officers and authorities together with the CFOs in the past few years. The extensive compliance audits conducted on irregular, fruitless and wasteful expenditure have highlighted control weaknesses in the SCM and payment cycles in the public sector, which can only be enhanced through the commitment of those officials tasked with governance and management responsibilities.
The AG has the difficult task of ensuring consistency in application of the Public Audit Act to ensure that audit teams remain objective and consistent in their audit approach. In an industry where judgement on the application of audit standards applies, it remains critical that consistent conclusions related to interpretations are upheld.
The AG should have regular engagements and provide clarity to Ministers, MECs, Mayors and others regarded as executive authorities to asset the effectiveness of the various audit and risk committees at different levels of government. Unfortunately, not all of these committees have been fulfilling their duties. Appropriate oversight must be ensured, as required by the PFMA and MFMA and its related regulations.
It is also expected that the AG will engage with accounting authorities and officers on the importance of capacity within the CFO offices.
We call on the new AG to give clarity to South Africa’s businesses and citizens on how it will build the trust needed to get the country back on its feet. Public confidence is a key pillar towards investment and the role of the AG is critical in achieving this based on the opinions expressed on the financial state of our government’s financial affairs.