The functions of the Auditor-General are reflected in section 188 of the Constitution and further regulated in the Public Audit Act, 2004 (PAA). Section 188 of the Constitution, 1996 states that the Auditor-General must audit and report on the accounts, financial statements and financial management of all national and provincial state departments and administrations and all municipalities. The mandate for Performance Auditing in South Africa was established in the Exchequer and Audit Act 1975, two years prior to the establishment of the same practice in Canada. However, it was only during 1986 that the first performance audit was carried out in South Africa at the then Department of Education and Training. The mandate to carry out and report on performance audits was further strengthened by means of the Auditor-General Acts of 1989 and 1995.
What is performance auditing?
An independent auditing process to evaluate the measures instituted by management to ensure that allocated resources are procured economically and utilised efficiently and effectively and, if necessary to report thereon.
Why conduct performance audits?
Performance auditing encourages learning and change within the public sector by providing new information and drawing attention to various challenges. It contributes to improvement and reform in public administration, providing the government with recommendations based on independent analysis. Thus, it adds value to the traditional functions of SAIs.
Performance auditing plays an important role in keeping the legislative well informed about governmental actions and the outcome of its own decisions. It increases public transparency and accountability, providing objective and reliable information on how public service perform.
Performance audit reports