The Southern African Institute of Government Auditors (SAIGA) is satisfying to see that at least 44% of the R500-billion Covid-19 relief package was utilised towards the health response and relief of social and economic distress which South Africa has been facing since the start of the pandemic. However, SAIGA says this is not  fully satisfactory when one looks at the 2020/21 PMFA audit outcomes especially in areas which could have been avoided if citizens are put first in everything we do.
These are some of the highlights reported by the Auditor-General Tsakani Maluleke in the Auditor-General’s 2020/21 Public Finance Management Act (PMFA) audit outcomes report released last week.
Highlights of the Report in relation to the Financial management of Covid-19 initiatives during the 2020/21, shows that only R218,54-billion from the R500-billion relieve package was used: 

  • R218.54bn of the R500bn package was spent by the end of the financial year, mostly on bringing financial relief to poor households and support for workers.
  • R49.3bn was spent on the R350 special relief of distress grant.
  • R55.8bn was used to support businesses and workers, with at least 13.9-million people benefiting from temporary employee/employer relief scheme claims.
  • R21.96bn was spent on providing healthcare support and treatment for those affected by Covid-19.
  • R29.59bn went towards supplying frontline workers with personal protective equipment and quarantine facilities, among others.
  • At least R38.9bn of the budgeted R70bn was used towards providing tax relief, such as tax deferrals and the postponement of some payments to the SA Revenue Service.
  • R18bn of a budgeted R200bn went towards providing bank loans, guaranteed by the government, to eligible businesses.
  • R4.8bn was given to municipalities through repurposing of grants and additional allocations to help protect communities and frontline workers against Covid-19 and manage its impact;

Taking a deep dive into the report, SAIGA CEO, Russel Morena says the country should be concerned with the continuous increase in the irregular expenditure amongst provincial and national government.
Morena says: “In 2019/20 PMFA report we were on R109.82 billion and this time we are at a staggering R166 billion, which is a 33.8% more irregular expenditure. It is also sad that this was not related to procurement, but issues of compliances and not or doing things by the rules. This issue of compliance and is one of the highlighted elements during the SAIGA conference, which took place a few weeks back. It appears that people do not want to do things in terms of what is required in the National Treasury guidelines, or perhaps there is a misunderstanding on how certain regulations should be implemented.
“As SAIGA, we are worried while critical basic needs and education are affected and at the same time you still see in the AG report, things like unauthorised expenditure to the value of R3.21 billion, all because of budgeting overspending. How do we overspent by R3.21 billion? We know that some of these overspending may be justifiable due to unexpected expenses because of Covid-9. However, the effective financial management systems in this case should be guiders in ensuring that we avoid using money we do not have, prioritise, or by simply spending wisely.”
He says: “As the organisation, we hope that the Public Entities which are still experiencing challenges with poor governance, unreliable financial management systems, and in the recent years these issues resulted in the government bailout simply because these SOEs are unable to pay their creditors. It is concerning because the funds aimed at assisting citizens affected by Covid-19 may end-up not being utilised effectively but towards bailing-out others”.
“For instance, in the report, 17 SOEs did not report their financial statements by the requested deadline of 15 October 2021. The biggest concern is we wouldn’t know for example if these 17 SOEs financial health is satisfactory. It is already concerning in the report that poor financial health of some departments and public entities remains a cause for concern, in simple language, unless drastic measures and improvements are made the government will bill-out more state institutions”.
Morena adds: “We would like to congratulate the departments and public entities, which received clean audits for the first time as well as those that maintained clean audits during the previous PMFA audit report outcome. Many departments and other public entities can learn from the likes of the department of Cooperative Governance and Traditional Affairs in the Eastern Cape, NTP Radioisotopes, department of Planning, Monitoring and Evaluation, and Dube TradePort in KwaZulu Natal just to mention a few that received clean audits. It is also sad to see that some audits worth of R2.14 billion worth of contracts because of missing or incomplete information.
“At SAIGA, we always believe that these problems affect us all and as an organisation in the audit and accounting space our doors are open to to all institutions that would like to be assisted with their financial and auditing challenges. We will continue with our constant engagements with the SOEs and departments in areas we have expertise.”

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