Only 27% of the 425 government departments and entities audited by the Auditor-General (AG) have received clean audits.

But the administration of President Cyril Ramaphosa had been driving increases in the number of clean audits achieved, according to Auditor-General Tsakani Maluleke.

Maluleke said several government departments would have moved into the clean audit zone without one or two problems.

On Wednesday, she briefed a joint sitting of Parliament's standing committees on the auditor-general and public accounts on the audit outcomes for national and provincial departments for the 2020/21 financial year that ended in March.

Maluleke told MPs the 115 auditees with a clean audit status represented 19% of the expenditure budget of R1.9-trillion managed by the national and provincial governments.

The 115 auditees include 48 departments and 67 public entities.

"The number of clean audits increases every year due to significant effort and commitment by the leadership, officials and governance structures of these auditees.

"At least 31 auditees are very close to obtaining a clean audit status. Some have been working towards this goal for many years and, if they achieve it in 2021/22, we anticipate an uptick in clean audits," Maluleke said in the 2020/21 cycle report.

She added it was often challenging to sustain a clean audit if financial and performance management systems and controls were not operating effectively.

"It is commendable that 62 auditees have managed to retain their clean audit status since the first year of the current administration."

Irregular expenditure increased to R166.85-billion from R109.82-billion in the previous year, despite the progress.

The National Student Financial Aid Scheme (NSFAS) was responsible for R77.49-billion of the total amount.

Criteria

Maluleke said this was mainly because NSFAS failed to consult with the higher education minister on the funding rules and eligibility criteria for student bursaries, as required by legislation.

"In reality, irregular expenditure could be even higher, as 30% of auditees were qualified because the amount they disclosed was incomplete and/or they had incurred irregular expenditure, but the full amount was not known. We were also unable to audit R2.14-billion worth of contracts because the information was missing or incomplete," she added in the report.

Meanwhile, unauthorised expenditure totalled R3.21-billion, all from budget overspending.

"Budget cuts and reprioritisation, along with emergency and unplanned spending in response to the Covid-19 pandemic, meant departments had less funding available. Claims against the state further reduced available budgets, as most departments do not budget for such claims.

"Even in these circumstances, good financial management should not suffer - instead, it should be reinforced to ensure that the limited funds available are spent wisely and within budget," Maluleke said.

There were also high levels of fruitless and wasteful expenditure, with 224 auditees losing a total of R1.72-billion in the current year.

In the 2020/21 audit cycle, the AG audited 679 departments and public entities, but the report focuses on the results of 425 audits.