The National Council of Provinces hears from the Office of Auditor-General that Eastern Cape is found wanting when it comes to reporting on issues of performance during the auditing processes.
Image: Armand Hough / Independent Newspapers
The Office of the Auditor-General has unveiled a mixed bag of results for the Eastern Cape government, which has made notable strides in financial reporting but continues to grapple with significant performance planning and reporting challenges.
In a briefing to the National Council of Provinces' Select Committee on Finance on Tuesday, acting provincial business leader Thobile Ntetha outlined the province's progress, underscoring both improvements and areas needing urgent attention.
Since the financial year commencing in 2019/20, the Eastern Cape has seen its number of clean audits increase dramatically from five to 12 by 2022/23.
However, a regression in audits has left the province with nine clean audits for the current year of 2023/24.
Ntetha highlighted that although nine departments achieved unqualified audits, a reduction from eleven, three areas remain qualified with findings, signalling that much remains to be done.
Among the notable advancements, the Department of Transport displayed significant improvement, marking a transition from previously qualified audits due to failures in disclosing fruitless and wasteful expenditures.
The Mayibuye Transport Corporation also upgraded its status from qualified to unqualified with findings, showing that sustained efforts in financial governance are yielding results.
The Eastern Cape Rural Development Agency notably shifted its audit rating from a disclaimer to a qualified opinion, after a prior inability to submit appropriate supporting documents for its financial statements in the last audit cycle.
However, Ntetha did not shy away from addressing the underlying issues, particularly within the Office of the Premier, which regressed due to inadequate performance reporting.
The committee was informed that several achievements could not be substantiated with credible data, highlighting weaknesses in governance structures.
Similarly, the Eastern Cape Legislature fell from a clean audit to an unqualified status due to its failure to ensure timely payments to service providers.
Departments such as Health and Education remain entrenched in qualified audit status, despite ongoing efforts to rectify these enduring issues.
The Education Department, specifically, has struggled with accurate accounting for tangible assets, while the Health Department faces challenges in reporting on contingent liabilities.
Ntetha underscored that performance reporting remains a critical problem area, with 11 departments submitting reports with material misstatements.
Following adjustments, only eight material findings remained, while 13 submissions were made without findings.
The acting business unit manager emphasised that inaccuracies in management decision-making directly impact service delivery, igniting a call for high-quality information and accountability.
Ntetha noted that the Educational Departments are lagging on crucial Medium-Term Strategic Framework objectives like public school reading proficiency and access to early childhood development initiatives.
He flagged that the Eastern Cape Rural Development Agency’s performance targets remained unmeasured, compounded by a lack of completed evaluations across several departments.
Significant service delivery issues were cited, requiring immediate focus from provincial leadership.
Other systemic problems within the province were disclosed, including delays in project completions, invalid variation orders, payments for services not rendered, and under-utilisation of completed projects.
Ntetha pointed out that despite the Transport Department’s development of a system to manage scholar transport, its potential remains untapped.
He also revealed that the province recorded R467 million in unauthorised expenditure in the 2023/24 financial year.
Irregular expenditure soared to R2,7 billion, with fruitless and wasteful expenditure amounting to R148 million.
"Overall, there are 30 material irregularities since financial oversight commenced in 2019, resulting in financial losses amounting to R197 million," Ntetha said.
mayibongwe.maqhina@inl.co.za
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