Pretoria: The Standing Committee on the Auditor-General (AG) has expressed its approval of the R3.47 billion in financial losses that have been either recovered or prevented by the Office of the Auditor General (AGSA) through its Material Irregularities (MIs) process. This achievement was highlighted during a briefing received by the committee from the Auditor-General of South Africa (AGSA) on its integrated annual report for the 2023/24 financial year.

According to South African Government News Agency, the AG has successfully recovered R1.55 billion in financial losses, is in the process of recovering another R1.14 billion, and has prevented a further financial loss of R0.78 billion for government departments, municipalities, and entities. These accomplishments underscore the significance of the new powers granted to the AG through the amended Public Audit Act. During the year under review, the AG identified 626 MIs related to non-compliance and suspected fraud. These included 500 MIs concerning material fi
nancial loss, 51 MIs related to substantial harm to the general public, 66 MIs concerning substantial harm to public sector institutions, and 9 MIs related to the misuse of material public resources.

An MI refers to any non-compliance with legislation, fraud, theft, or breach of fiduciary duty that could lead to material financial loss, misuse of public funds, or substantial harm to a public sector institution or the public. The amended Public Audit Act introduced the concept of MIs and expanded the powers of the AG, allowing it to refer these irregularities to relevant bodies for investigation if the accounting officer or authority fails to take appropriate action.

The committee has also welcomed the AGSA’s culture shift strategy, which involves evaluating auditees not only based on compliance but also on service delivery performance. This evaluation revealed that 23% of government departments and entities and 45% of municipalities are currently causing harm, while 40% of departments and entities and 43% o
f municipalities are not meeting basic requirements. The committee further commended the AG for achieving a clean audit opinion for the year under review, emphasizing the importance of a functional AG office in promoting accountability and enhancing public sector performance.