BDFM Online
Thursday, November 16, 2006
Political Correspondent
CAPE TOWN - Outgoing auditor-general Shauket Fakie has raised concern over poor fin-ancial management in national departments in a general report on national audit outcomes for the 2005-06 financial year tabled in Parliament yesterday.
Fakie gave the standing committee on public accounts a preliminary briefing on the report a few weeks ago. He leaves office at the end of the month and will be replaced by deputy auditor-general Terence Nombembe.
Fakie said the most noticeable finding for the 2005-06 financial year was the significant increase in qualification issues in national departments and national public entities. The number of departments whose accounts had been qualified had risen from seven in 2004-05 to 11, he said.
Also, no national department that was qualified in 2004-05 managed to overcome that qualification in 2005-06.
However, Fakie urged that the increase in the number of qualifications should be seen in the context of constantly improving audit processes and heightened disclosure requirements.
Other contributing factors were inadequate departmental systems, the move from cash to accrual accounting and the lack of prioritisation of financial management by accounting officers.
"We have identified that shortage of adequate skills and under-resourcing are the root of qualifications for most departments. An extensive training drive or a re-look at the recruitment process is urgently needed to reverse the situation," Fakie said.
"Also, we found out that some of the processes within departments are inefficient - they are not simple, effective and easy to understand. There are cases where departments have to go through very complex, lengthy and voluminous filling-in of forms and passing of paper bef-ore critical decisions are made.
"In most instances depart-ments do not have adequate in-year monitoring and reconciliation mechanisms where they track their financial management issues throughout the year even before we do our audits.
"This is creating pressure because you find that there is a huge rush to try to get all documentation and performance information just in time for the auditor-general's audits," Fakie said.
Qualification issues identified included asset management, accounts receivable and revenue. Traditional matters emphasised that were elevated to qualifications included personnel and other expenditure.