Most provinces have shown an improvement in their audit outcomes, Auditor-General Kimi Makwetu said on Wednesday.

The Auditor-General said the increase in the number of clean audits and an overall net improvement in audit results showed that audit outcomes were improving generally.

Releasing the audit outcomes for the financial year 2013/14 on Wednesday, the Auditor-General singled out Gauteng and the Western Cape provincial departments as having led the charge in performing admirably.

“The number of auditees with clean audit opinions improved by 25%, with the highest contributors being Gauteng and Western Cape.

“Regressions in the number of auditees with clean audit opinions were noted at both national and provincial auditees,” the Auditor-General said, attributing the slump to slippages in controls.

He said the biggest contributors to the total number of clean audits were national government with 53 clean audits (23% of national auditees), Gauteng 19 (54% of their auditees) and the Western Cape with 18 (78% of their auditees).

The Auditor-General said Limpopo and North West have the lowest number of auditees that received financially unqualified audit opinions, with the Western Cape achieving 100% and Gauteng 91%.

While there has been an improvement in the overall audit outcomes of Mpumalanga when compared to the previous year, a majority of the auditees received unqualified audit opinions with findings. 

In KwaZulu-Natal, there was a 14% reduction in the number of auditees with financially unqualified audit opinions with no findings, while the number of auditees with financially qualified financial statements remained unchanged. Five improvements were offset by five regressions, resulting in no net improvement in the audit outcomes of the province.

Makwetu said in total, 165 auditees, or 37%, received a financially unqualified audit opinion only because they corrected all the misstatements that were identified during the audit.

Only 43% of the auditees would have received an unqualified audit opinion had the AG not identified the misstatements and allowed them to make the corrections.

He said the most common areas in the financial statements that were qualified were in the following areas:

• Property, infrastructure, plant and equipment (departments and public entities);
• Irregular expenditure (departments);
• Commitments (departments);
• Receivable and revenue (public entities).

AG pleased with financial skills capacity

The Auditor-General said he was pleased with the presence of strong financial accounting capabilities.

He said, however, that he was still concerned about the stability of the skills based on the number of material misstatements that had to be corrected during the audit cycle.

The quality of annual performance reports were improving every year, the Auditor-General said.

“Sixty-two percent of auditees now report their performance in a useful and reliable manner.

“However, only 42% of auditees submitted annual performance reports without material misstatements.

“This means that 20% of the auditees had good outcomes only because they corrected the misstatements identified during the audit,” Makwetu said.