Cracking Down on Corruption Through New Auditor-General Powers
By Jessie Taylor
Auditor-General Tsakani Maluleke has embraced new powers afforded to her in recently passed legislation to clamp down on corruption. She estimated that her zero-tolerance stance on corruption had saved the government more than R630-million in potential losses thanks to accounting officers being compelled to act after being issued with material irregularities.
SA’s First Female Auditor General
Ms Maluleke recently told Parliament that the powers given to the Auditor-General in the Public Audit Amendment Act are starting to bear fruit, preventing further losses to the state. She said that in the 2021-22 financial year, 179 material irregularities were identified in national and provincial government entities, leading to a loss of R12-billion. However, the losses could have been significantly more without the new powers. Ms Maluleke estimated that accounting officers’ actions after being issued with material irregularities prevented the loss of a further R636-million. She believes the additional powers have started to move accounting officers from inaction to action in the quest for clean government. Ms Maluleke is the first woman to be named South Africa’s auditor-general in the institution’s 100-year history. She was also the first female deputy auditor-general.
She has more than 20 years’ experience as a Chartered Accountant, working in the private and public sectors in various areas, including auditing, consulting, corporate advisory, development finance, investment management and skills development agencies.Ms Maluleke has also served on the Presidential BEE Advisory Council, where she successfully led a subcommittee that developed recommendations for broad-based black economic empowerment, as chairperson of the CA Charter Council, and as a non-executive member of the Financial Advisory and Intermediary Services (FAIS) Ombud committee, where she advised the setting up of the FAIS Ombud office.
She has a passion for actively contributing to advancing black men and women in the accountancy profession, and she has worked with various organisations, including Business Unity South Africa, African Women Chartered Accountants, and the Association for the Advancement of Black Accountants of Southern Africa (Abasa), of which she is a past president. She currently holds the position of the non-executive chairperson of the board of the South African Institute of Chartered Accountants. She is also a fellow and moderator of the African Leadership Initiative and the Aspen Global Leadership Network.
Taking a Tough Stance On Corruption
Ms Maluleke said for years, the Auditor General of South Africa had sounded the alarm over increasing mismanagement, the leakage of public funds, and increasing irregular expenditure – demonstrating that little attention was being paid to the Auditor General’s reports. When the Public Audit Amendment Act came into effect in 2019, it allowed the Auditor General of South Africa to refer suspected material irregularities found during audits to public bodies for further investigation and to compel accounting authorities to “take appropriate remedial action” where irregularities exist. Should accounting authorities or officers fail to implement the Auditor General of South Africa’s remedial action, the Auditor-General can issue a certificate of debt requiring the officer or authority to repay the amount in question. Ms Maluleke said the Auditor General of South Africa was encouraged to see improved responsibility from heads of departments to respond to material irregularities.
She said they started subjecting departments and entities to queries into material irregularities after the law was passed. These were found in vulnerable areas like procurement, payments, resource management, revenue management and misuse of public resources. “We identified 179 material irregularities for provincial and national government together, and 169 of those had an estimated financial loss of R12 billion. We also identified that nine of these related to causing substantial harm to public institutions,” she said.
“In the majority of instances, accounting officers have taken appropriate action. Eighty-two per cent of instances are where accounting officers are taking the right sort of action. Essentially, the encouragement we want to communicate is that there is improved responsibility in the system. Accounting officers are responding to material irregularities,” said Ms Maluleke.
In addition, the Auditor General of South Africa has referred eight material irregularities to public bodies, such as the Hawks and Special Investigation Unit, for further investigation. “The big story here is we have been able to use this instrument [material irregularities] to get a number of accounting officers to shift from inaction – which was the big worry when the law was changed – to action, which is what we want to see,” Ms Maluleke said. “The reality is that public sector performance, accountability and consequence management will be realised only if all role players diligently execute on their given mandate and collaborate in instilling a culture of accountability and positioning public institutions to better serve citizens.”
About the Auditor-General of South Africa
The Auditor-General of South Africa is the supreme audit institution of South Africa. By law, it is the only institution that has to audit and report on how the South African government is spending taxpayers’ money. It was established in 1911, but the roles and responsibilities of the organisation were expanded when the South African Constitution came into effect in 1996.
The Auditor-General of South Africa annually produces audit reports on all government departments, public entities, municipalities and public institutions. In addition, the audit outcomes are analysed in general reports that cover both the Public Finance Management Act (PFMA) and Municipal Finance Management Act (MFMA) cycles, and the Auditor-General of South Africa produces reports on discretionary audits, performance audits, and other special audits.