PFMA
WHAT DO PFMA AUDIT RESULTS REALLY MEAN? Phillip Rakgwale
CISA, CIA, CFE, RGA, M.Inst.D Chairperson of the SAIGA council
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outh Africa is facing unprecedented levels of corruption within its public sector. The audit results from the Auditor General South Africa (AGSA) reveal that just one-third of the national and provincial ministries have achieved clean audits. The primary goal of financial management is to optimise value, establish sustainability, and concentrate on their fundamental operations. The Public Finance Management Act (PFMA) governs the obligations and tasks of public authorities in adhering to financial regulations. The findings indicated that a substantial proportion of South African national and provincial departments, as well as stateowned enterprises did not get clean audit reports and failed to adhere to the financial management standards outlined under the PFMA . As a result, large sums of money are not distributed to the intended recipients. This failure negatively impacts
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South Africa’s prospects for growth and of addressing the challenges of inequality. The irregular expenditure disclosed in 2022-23 totalled R63,37 billion, with high-impact auditees (Key service delivery departments and entities) being responsible for R53,77 billion (85%) of this amount. In terms of a National Treasury instruction note issued in December 2022, auditees do not have to include irregular expenditures incurred in prior years or the closing balance of irregular expenditures in their financial statements. Therefore, the actual amounts incurred may differ where prior-year amounts were not disclosed in the annual report or where the annual report was not submitted.
Key findings from the Auditor General's report The audit results indicate a general improvement; yet there are still deficiencies in the planning and reporting of service delivery, difficulties in managing infrastructure, and imprudent
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