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Since 2001, the Democratic Alliance has been monitoring the annual reports of National Departments and state entities, and compiling a detailed analysis of the Auditor General's (AG) findings.

On Thursday the AG refused to name and shame the worst performing national bodies. Since this information is available in the public domain, for everyone to see, but is clearly an overwhelming amount of information, the DA has dedicated some time to assessing the annual reports of all national departments. We have done this for the past eight years, and collated the AG's findings in a table that can be downloaded from the DA Media Centre.

Audit outcomes are exactly that, ‘outcomes', and they represent the best measure of a department's ability to carry out its duties. It is clear after the 2008/09 Annual Reports were released that the AG, the person responsible for assessing the performance of our national departments, has found many of them to be grossly underperforming, failing to deliver on their mandate, and wasting significant amounts of public money. The heads of national departments that receive qualified opinions should be held accountable. First and foremost, the Director General must be held accountable, secondly, the Minister of the department must be held accountable, and thirdly the Chief Financial Officer. Accountability means consequences, and action now needs to be taken against those individuals who haven't properly managed public money.

This document provides an overview of the AG's opinions of government departments over eight financial years, from 2001/2002 to 2008/2009 and proves once again that too many government Ministers and Directors-General are simply unable to properly manage public money. In many cases this overview paints a picture of financial disarray and mismanagement that should be ringing alarm bells.

The consequences are far reaching for South African citizens and have a significant impact on service delivery. If government cannot properly spend public money, not only does service delivery become undermined, stalled or simply non-existent, but public confidence in government is undermined and the institution itself loses much needed credibility in the eyes of ordinary citizens. A defunct government is simply a breeding ground for corruption and repeated failure.

Out of the 271 annual audits conducted by the Auditor-General on the 34 government departments and public entities, from 2001/02 to 2008/09, the DA found the following:
• There were only 14 ‘Clean Reports' during this period;
• 81 reports were ‘Qualified', received an ‘Adverse Opinion' or a ‘Disclaimer'; and
• 127 reports received an ‘Emphasis of Matter/s'.
In the 2008/09 financial year, the following audit opinions were recorded:
• CLEAN - 1/34
• Emphasis of Matters - 9/34
• Qualified Opinion - 12/34
• Disclaimer of Opinion - 0/34
• Other Matters - 12/34
The Good:

Not every department is problematic. The only department to receive a clean audit this year was the Department of Science and Technology, while other departments, still not satisfying the AG entirely, were criticized for only minor problems, and must be commended for their efforts:
• Education
• Environmental Affairs and Tourism
• Foreign Affairs / International Relations
• Government Communications and Information Systems
• Housing
• Minerals and Energy
• National Treasury
• Public Service and Administration
• Public Service Commission
• South African Management Development Institute (PALAMA)
Stats SA (annual report was recalled, and new report has yet to be released)

The Bad:

Entities that receive Qualified reports, Adverse Opinions or a Disclaimer from the Auditor-General are deemed to be in a state of financial disarray and mismanagement. Entities that receive a report with an Emphasis of Matter are deemed to have failed to comply with their agreed programme of action or failed to comply with statutory requirements.

The Democratic Alliance proposes that any government department that receives three Disclaimed, Qualified or Adverse audit opinions in a row should have their Minister and their Director General, who is in charge of the department, removed from their positions and any further role in government.

If a minister is put in charge of a specific department they should commit themselves fully, and not look to change departments when their inefficiency and failure to deliver become apparent. This defeats the ability to hold guilty parties to account.

Many of the departments are managed by new Ministers and Directors General or have seen Ministers change portfolios since President Zuma's term in office began. This would seem to make it difficult to hold anyone to account. But, many Ministers previously in charge of dysfunctional departments are still in the cabinet, and even if they hold different portfolios, they should still be held to account. These Ministers are:
• Dr. Mantombazana 'Manto' Tshabalala-Msimang
• Dr Nkosazana Dlamini Zuma
The following departments are the worst performing entities:
• Correctional Services - 8/8 Qualified Opinions
• Defence - 7/8 Qualified Opinions
• Health - 7/8 Qualified Opinions
• Home Affairs - 5/8 Qualified Opinions, 3/8 Disclaimer of Opinion
• Labour - 6/8 Qualified Opinions
• Land Affairs - the last 4 annual reports received Qualified Opinions
• Sport and Recreation - the last 3 annual reports received Qualified Opinions
• Independent Complaints Directorate - 3 consecutive Qualified Opinions
• Public Works 4/8 Qualified Opinions
• The Presidency - second consecutive Qualified Opinion
• Provincial and Local Government - first Qualified Opinion in 8 years
If the past eight years are an illustration of government's commitment, then financial mismanagement and administrative incompetence seems now to be accepted as common practice and consequences do not follow.

The DA believes it is time for the ANC government and the President to put public interest first. The President appoints Ministers and Directors-General. He must now take action on their failings.

It is a gross abuse of public confidence to keep people in office who quite clearly cannot manage an administration or the financial requirements of a public body. The DA will be monitoring the performance of Jacob Zuma's new cabinet to ensure that they are carrying out their duty efficiently and competently.

The Democratic Alliance will undertake a thorough investigation of all entities that have received sustained criticism from the Auditor-General. It will use SCOPA, questions and the National Assembly to conduct an investigation of these and other problems in the coming months, to ensure that the departments and the officials who run them account to the public.

The Ugly:
• The Department of Public Works has an outstanding debt of R419 million owed by a number of national departments and public entities, as well as an outstanding debt of R67 million, which is likely to be written off.
• The Land Bank's 2008/09 Annual Report has revealed that it lost R16.5-million in fruitless and wasteful expenditure in the last financial year. The majority of the wasteful expenditure is as a result of "payroll-related payments" and the late payment of utility accounts. Furthermore and even more disturbing, the Land Bank has been unable to pinpoint who is responsible for the money lost. In explaining the expenditure the Board of Directors argues that this misspent money was identified with the purpose of learning "...the root causes for its occurrence to prevent it in the future."
• The National Health Department received another qualified audit report, which means that in the eight years since 2001, the department has received only one unqualified report (in 2002/03). This is the legacy of the outgoing Director-General, Thami Mseleku, and whoever replaces him will face the momentous challenge of getting the department's systems and finances back on track. We wish him or her luck.
• The Department of Home Affairs (DoHA), has departmental revenue amounting to R356 million which can not be accurately assessed due to the lack of an audit trail and serious inefficiency of the accounting officer (Director- General). Irregular expenditure to the amount of R198,2 million has also been recorded.
• The Department of Defence (DOD) received its tenth successive qualified audit opinion in the 2008/2009 Financial Year. The DoD's finances are in meltdown with over R100 million of irregular expenditure, R4,4 million of fruitless and wasteful expenditure over the past financial year, and possible irregular expenditure of R2.9-billion on the procurement of the Airbus A400M.
• The Department of Correctional Services was found to be guilty of unauthorized expenditure to the amount of R483 million, incurred by the department as a result of implementing the Public Service Co-coordinating Bargaining Council resolution No. 1 of 2007 on the improvement in salaries and other conditions of service for the financial years 2007/08 to 2010/2011. Additional funds to support this were not made available by the treasury to the department.
• The Department of Sport incurred irregular expenditure of R45 million due to non-compliance with Treasury regulations.
• The Department of Defence, issued an errata to the DOD Annual Report regarding their APPROPRIATION STATEMENT for the year ended 31 March 2009. A number of figures were changed on three pages.