For the past thirty years, we have heard of well-connected individuals, government ministers, various government departments, and public officials being involved in significant material irregularities, including fraud, theft, and irregular expenditure.
It has been alleged that many billions of rands have either gone missing or been wasted, with little to no accountability in the past.
Now, South Africa finds itself in a situation where the government is struggling to meet its obligations, and all departments of state-owned enterprises have been asked to, firstly, “tighten their belts” and, secondly, close any loopholes that could or would lead to fraud and theft.
Under the Government of National Unity, a new energy has emerged to enhance accountability, address irregular expenditure, and ensure compliance with the Public Finance Management Act.
Enter the Auditor-General of South Africa (AGSA).
The AGSA’s mission is to ensure government remains “clean.” In 2019, the concept of material irregularity was introduced in its auditing process to enhance accountability and address irregular expenditure.
I attended a portfolio committee meeting of the Department of Employment and Labour in September 2024, where the Auditor-General emphasised the need for reliable reporting and better oversight of financial statements.
I have reported numerous material irregularities and unlawful expenditures within the Department of Employment and Labour to Independent News. Specifically, the Unemployment Insurance Fund (UIF) and Compensation Fund (CF) have failed their audits over the past five years. Sadly, at the end of 2023, these two entities under the Department did not even submit their figures to the Auditor-General. Key performance issues identified over the past four years include discrepancies in reports, poor financial planning, and ineffective management.
This calls for reliable reporting and better oversight, as the government cannot afford to throw money at a department wasting taxpayers’ hardearned income.
At the portfolio meeting, various MPs expressed concerns and frustration. There was a strong call for better oversight and transparency.
The Auditor-General’s staff assured the public that they would address long-standing issues to ensure proper accountability – a breath of fresh air. MPs were informed that the reorganisation of the Department of Labour into the Department of Employment and Labour was aligned with the employment mandate without changing responsibilities.
Chapter 9 of the South African Constitution highlights the importance of the AGSA’s independence. It is crucial for South Africa that the AGSA remains independent and is supported by both Parliament and the public. The AG assesses whether financial statements present a true and fair view, with opinions ranging from qualified to adverse.
Additionally, they examine internal controls that influence audit outcomes. It is important to ensure that irregular expenditures are investigated, remedial actions are taken, and disciplinary measures are implemented against responsible officials.
Responsibility must be enhanced, and any official involved in material irregularity should face consequences, potentially even criminal prosecution. Consequence management must be practised consistently. It is time for government employees and politicians to be properly investigated and held accountable for wrongdoing. Hopefully, prosecutions will occur sooner rather than later.
The AG’s office is also developing preventative control guidance and an awareness manual to provide guidelines for transparent and fair supply chain management. The new Government of National Unity must use the AG effectively and ensure their recommendations are followed.
What is clear is that poor financial planning and ineffective process management have plagued entities in the Department of Employment and Labour. The Compensation Fund still faces issues with supporting evidence for its financial statements, posing a fraud risk and undermining accountability.
Even the Supported Employment Enterprise (SEE) lacks a culture of accountability and consequence management. The UIF debacle during COVID, regarding the Temporary Employment Relief Scheme (TERS) benefit payment, showed the UIF as a complete failure, unable to maintain accurate unemployment benefit payment records.
At the meeting, I called for more effective consequence management and better oversight of all entities under the Department. I expressed my frustration with entities setting their own targets and marking their own performance.
I remain hopeful for a better future, where the Government of National Unity ensures that the Auditor-General and her staff are given the freedom to uphold clean governance.
* Michael Bagraim is a veteran labour lawyer.
** The views expressed here are not necessarily those of Independent Media.
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