Management discipline key to ensuring value for money

The Auditor-General of South Africa (AGSA), Tsakani Maluleke, says South Africa must improve coordination across public institutions and government in order to minimise duplication and fragmentation.

She made the remarks while addressing the ‘Governance and Technologies in a Disrupted Economy’ seminar at the Durban International Convention Centre (ICC) on Monday.

“Management disciplines are also key to ensuring that value is derived for money spent on projects, especially infrastructure development and maintenance.

“For some time now, we have highlighted the need for competence and stability in the administration of public institutions. We have also cautioned against overreliance on consultants, and raised the issue on the costs of consultants versus the return on investment received,” Maluleke said.

Over the past five years, she said the AGSA had reported on the overreliance of municipalities on consultants who assist them with compiling Audited Entity Financial Statements (AFS) for audit.

“We have reported that South African municipalities spent R5.3 billion on consultants for the purpose of compiling financial statements for audit, with 70% of municipalities using them every single year during this period.

“In the 2020-21 financial year alone, municipalities spent R1.26 billion on consultants. Sometimes, even where consultants are used, we receive annual financial statements with material errors,” she said.

Maluleke said with better governance and compliance with legislation, processes and policies, government would support the country’s collective desire to ensure that public institutions and officials deliver a better quality of life for all people.

“Now more than ever, the need for strong governance, capable institutions and competent public officials who deliver on the hopes and aspirations of citizens, is unanimous and undisputed,” she said.

The AGSA has over the years demonstrated that poor audit outcomes strongly correlate with weak governance, instability at key management and leadership levels, weak internal controls and ineffective consequence management.

These features, she said, inevitably lead to poor performance and service delivery, as well as weakened financial health and overall capability of public institutions.

“As the AGSA, we have reported on poor audit outcomes and inadequate service delivery in many municipalities. One of the root causes of such outcomes, is the pattern of poor conduct by those that are elected and appointed to serve as stewards over public institutions.

“All too often, we find that these leaders do not invest building public institutions with a culture of performance, accountability, transparency, and integrity,” she said.

One of the contributing factors to the lack of improvement in the audits outcomes, Maluleke said, “is the lack preventative controls and consequence management, which translates directly into the leakage and inefficient use of public resources”.

“If done well, preventative controls and effective consequence management can go a long way towards ensuring that resources are used efficiently and effectively in ways that can truly deliver on the aspirations of citizens,” said Maluleke.

Source: South African Government News Agency