Changes to Public Audit Act Proposed

Dr Claudelle von Eck | CEO | Institute of Internal Auditors South Africa (IIA SA) | claudelle@iiasa.org.za |

A lack of consequences to civil servants involved in auditing the public finances has necessitated wide-ranging legislative changes to the Public Audit Act (PAA).

This is according to the Auditor-General, Kimi Makwetu. In addition, Makwetu has said that the Public Audit Amendment Bill, which is soon to be debated in parliament, proposes 11 changes to the PAA.

The Bill will seek to give the Auditor-General more powers, such as referring undesirable audit outcomes to the relevant authorities, as well as personally recovering losses from accounting officers or authorities.

Silindile Kubheka, the Chief Financial Officer at National Treasury, reminded internal auditors that their mandate was to give assurance that internal controls are effective. This should minimise the need for the AG’s use of the powers sought in the Bill.

According to Makwetu, “The underlying theme of the research (for the Bill) was to strengthen the AG’s ability to restore the integrity of systems and processes to facilitate service delivery, and the pursuit of goals, for which public money has been appropriated.”

Makwetu said he had researched legislation in 13 countries for the proposed PAA changes.

Kubheka, meanwhile said National Treasury and government wholly endorsed the Amendment Bill which should be read in conjunction with the Public Finance Management Act (PFMA).

The PFMA was enacted in 1999 and is one of the legislative pillars of democratic SA. According to National Treasury it is designed to:

• Modernise the system of financial management in the public sector;
• Enable public sector managers to manage, but at the same time be held more accountable;
• Ensure the timely provision of information; and
• Eliminate the waste and corruption in the use of public assets.

It is crucial that internal auditors question whether leaders have taken ethical considerations of their policies, decisions and actions.

It is clear to the IIA SA, which represents 8,000 members in the internal audit profession, that both internal and external audit are critical to the state functioning and meeting the service delivery needs of our people. Increasing the powers of the Auditor General, to ensure that those who steal from the state’s coffers are brought to book, is a win for internal audit too.