PFMA 2019-20 Report

on national and provincial audit outcomes 26 If accounting officer/authority does not appropriately deal with material irregularities, our expanded mandate allows us to: Refer material irregularities to relevant public bodies for further investigations Recommend actions to resolve material irregularities in audit report Take binding remedial action for failure to implement recommendations Issue a certificate of debt for failure to implement remedial action if financial loss was involved MATERIAL IRREGULARITIES OUR EXPANDED MANDATE The responsibilities and duties of accounting officers and authorities are well defined in the Public Finance Management Act and other enabling legislation, which are all underpinned by the basic values and principles governing public administration as set out in our constitution. These include the need for high standards of professional ethics, accountability and transparency as well as the promotion of the efficient, economical and effective use of resources. Our audits have for many years been highlighting a systemic failure across government to establish the systems, processes and controls required to make the constitutional principles and the requirements of the Public Finance Management Act and similar legislation the norm. Not only are irregularities and the resultant losses, misuse and harm not prevented from happening, they are also not appropriately dealt with when they are identified. Our mandate has always been to audit and report on these matters in order for corrections to be made by accounting officers and authorities, overseen and supported by executive authorities. Our reporting to oversight bodies enables them to also play their oversight role effectively. The amendments to the Public Audit Act became effective on 1 April 2019 – which provided us with an expanded mandate to go beyond audit and reporting in an effort to strengthen the accountability mechanisms. Rather than being a punitive measure, the amendments are intended to act as a complementary mechanism in the broader public sector accountability value chain by strengthening financial and performance management, which in turn will contribute to improved accountability. The expanded mandate did not change the role and responsibilities of the accounting officers and authorities, executive authorities and oversight. We do not take over the role of the accounting officer or authority who already have the responsibility to prevent irregularities and take action when it occurs. By identifying material irregularities, we support accounting officers and authorities by bringing to their attention the irregularities that could have a significant impact on finances, resources and service delivery while also empowering them to timeously take the appropriate steps in terms of legislation. This will lessen the adverse effect of such irregularities on auditees, set the right tone for accountability, highlight the need for consequences, and encourage a behavioural change at the highest levels. The amendments to the Public Audit Act and the Material Irregularity Regulations have been shaped in a manner that supports the process of fair, transparent and legally sound administrative justice, by providing an opportunity to the accounting officer or authority to take the actions required to deal with the material irregularities. We use our additional powers only where the accounting officer or authority is not dealing appropriately with such irregularities. This process can be depicted graphically as follows: