The Auditor-General’s office will start quarterly performance audits on national and provincial levels, in an effort to timeously detect red flags in the financial reporting and operational performance of State departments.

“By conducting these audits on a quarterly basis, instead of annually, we will ensure that early warning signs relating to noncompliance and transgressions by departments are identified and that action can be taken by the relevant leadership,” Auditor-General Terence Nombembe said on Wednesday.

In the 2009/10 Auditor-General report, only three out of the 35 departments were able to show improvements. The remaining departments seemed stagnant, with nine remaining unchanged with qualified audits, nine remaining unchanged with unqualified audits, seven regressing and seven improving.

The report showed that disclaimers were largely confined to the departments of Public Works, Health and Education, which were also the departments with the highest spending.

However, Nombembe said that these were large departments that often had to deal with a lot of complexities in their financial reporting.

“It is often faulty or incomplete reporting on provincial levels that filter through to national levels. For instance, in the educational sector, specific programmes, such as school nutritional programmes are often not adequately documented on provincial level, which makes it difficult for the national department to keep track.”

To increase accountability of the departments, leadership as high up as Ministers, have recommitted to monitoring processes.

“Ministers have been taking their eye off the monitoring of auditing practices in recent years. However, the Auditor-General has received assurances from the Ministers that they would take personal ownership in dealing with compliance issues relating to best practices in their departments on national and provincial levels. This will hopefully create a culture of discipline, where people will have to provide answers when they do not deliver of certain promises and action plans,” Nombembe said.

The Auditor-General report identified R831-million of irregular expenditure by departments in 2009/10, with about R27,6-million being fruitless and wasteful expenditure.

Further, material losses and impairment of assets of R109,7-million were incurred by seven departments, of which the biggest expenditure of R53,3-million related to fraudulent activity within the Department of Rural Development and Land Reform.

Significant material losses and impairment of assets, amounting to R2,5-billion was also incurred by State-owned enterprises, of which R1,5-billion related to the Petroleum, Oil and Gas Corporation of South Africa.

Nombembe noted that one of the most significant challenges that provincial and even national departments were faced with, was a lack skills and human resources capacity.

“Further exasperating the issue, is a lack of management. A lot of people are not doing the work that they have to do and then rely on consultants to get the job done.”

Speaking to Engineering News Online, Nombembe said that the issue required direct attention and intervention from the Ministers. He noted that a big part of the problem was the fact that strategic human resources plans were not being properly implemented, or did not even exist in some departments.

“We are also busy with a review to assess the extent and impact of government entities using consultants to do the work.”

The Auditor-General noted that the review would be released later in the year.