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Gauteng: Gauteng reports significant and sustained improvement in Financial Management

David Makhura
Photo by Duane Daws
David Makhura

1st September 2015

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/ MEDIA STATEMENT / The content on this page is not written by Polity.org.za, but is supplied by third parties. This content does not constitute news reporting by Polity.org.za.

Today we publish the outcomes of the Auditor-General’s report for the 2014/15 financial year.

I am pleased to announce that a total of nineteen departments and public entities of the Gauteng Government achieved clean audit status for the 2014/15 financial year; an indication that our province is well on track towards achieving its goal of establishing credible financial control systems and ultimately realising 100 percent clean audits.

The Auditor-General’s report shows that our province is increasingly making good in managing its finances. Furthermore, no unauthorised expenditure was incurred by the Provincial Government during this period.

This sustained improvement was made possible through the implementation of firm and decisive leadership that has put in place action plans to address recurring audit findings; continuously improving financial management capacity and practices; taking corrective action to tackle poor performance and a strong political will to build a culture of accountability and excellence.

Regular interactions between the Executive Council, Audit Committee Chairpersons and the Auditor-General’s Office to address issues of mutual concern regarding sound financial management also contributed to our sustained success.

The improvement in audit outcomes was also achieved due to, amongst other things, intensive support provided by the Gauteng Provincial Treasury (GPT) to departments and entities on the preparation of their interim and annual financial statements, coupled with adequate audit working paper files.

In line with the Provincial Government’s objective to move departments and entities to positive audit outcomes, the Departments of Finance and Economic Development and the Gauteng Gambling Board, have made a big leap from unqualified audit opinions with findings in prior years, to the clean audit opinion category in 2014/15.

Another positive outcome was recorded by Human Settlements, which moved from a qualified audit opinion in 2013/14 to achieving an unqualified audit opinion with other matters in the year under review. This achievement was made possible through concerted efforts to ensure that all prior year’s commitments are properly accounted for.

The departments that achieved clean audits are as follows:

  • Office of the Premier
  • Provincial Legislature
  • Provincial Treasury
  • Social Development
  • Cooperative Governance and Traditional Affairs
  • Finance
  • Economic Development


The following public entities achieved clean audits:

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  • Dinokeng
  • Gauteng Film Commission
  • Gautrain Management Agency
  • Gauteng Partnership Fund
  • IDZ Development Company
  • Constitutional Hill Precinct
  • Innovation Hub
  • Greater Newtown Development Company
  • Cradle of Humankind World Heritage Site
  • Gauteng Tourism Authority
  • Gauteng Gambling Board
  • Supplier Park Development Company


I would like to commend all departments and entities that have maintained and improved their audit outcomes. The Executive Council is committed to ensuring that the best practices implemented by these departments and entities should be shared across the Gauteng City Region to ensure that we maintain effective management of financial resources across government.

While this sustained improvement is commendable, I remain conscious of the fact that more work still needs to be done, particularly in the area of compliance with rules and regulations as identified by the Auditor-General.

I am deeply concerned about the increase in irregular expenditure due to a failure to comply with laws that govern financial management in the public sector. Human Settlements was one of the main contributors and the reasons were amongst others that a substantial amount of money meant for building new houses was spent on fixing asbestos roofs damaged by hailstorms and a clean-up of previous year’s qualification issues. Shifting the Human Settlements budget to deal with disaster is something that should never be repeated.

Following my instructions, the MEC for Finance has already written to all departments to emphasise that in line with Sections 38 and 51 of the Public Finance Management Act (PFMA), urgent investigations must be conducted and disciplinary measures taken against those officials whose actions resulted in irregular expenditure. We are absolutely committed to running a clean administration that is accountable, responsive and transparent.

It is for this reason that we are rolling out the Open Tender initiative to all departments in the province to, amongst other things, minimise issues of non-compliance with supply chain management processes.

Furthermore, I will be meeting with the MECs, HODs and CEOs whose departments and agencies obtained negative outcomes. They have to account for bad audit outcomes and present a sound roadmap to 2015/16.

My position is clear: there must be firm leadership from MECs and consequences for poor performance on the part of accounting officers. We must instil a high performance culture, ethical conduct and sound financial management in government.

The provision of quality public healthcare services across the GCR is important. We continue to work closely with the Department of Health to ensure that revenue generated by health facilities including patient fees is properly accounted for in accordance with approved regulations. These are the weaknesses that resulted in the department getting a qualified audit opinion during this audit cycle.

Moreover, the Gauteng Provincial Treasury, under the leadership of MEC Barbara Creecy, will conduct extensive reviews of monthly, quarterly and annual financial statements, and provide targeted financial reporting training to departments and entities as part of a broader intervention to eliminate material amendments to the annual financial statements going forward.

I must point out that we have achieved some of the commitments that this administration made last year. We are closely monitoring implementation of the Open Tender system in order to expand it across the entire Provincial Government. We want transparency and accountability regarding procurement and contract management. The provincial banking tender was recently awarded to FNB through the Open Tender system.



Issued by Gauteng Government

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