‘Slight improvement in audits are not enough’ – Lim AG

Although the province has shown a slight improvement in its audit outcomes, the Auditor-General (AG) in Limpopo is far from confident that the province will be able to stand on its own feet when the Section 100 intervention teams withdraw completely.

AG Dirk Strydom last week said there was still a lot that should be a concern.

“There are a lot of issues that still need attention and there are questions around the sustainability of the improvements,” he said.

The AG’s audit opinions for provincial departments for the 2013/14 audit period were as follows:

• One clean audit – department of cooperative governance, human settlements and traditional affairs.

• Five unqualified audit opinions (with findings) – office of the premier, legislature, treasury, roads and transport, and safety and security

• Six qualified opinions – the departments of health and public works (from a disclaimer in 2012/13), agriculture, social development and sport, arts and culture (these three departments’ audit opinions remained unchanged), economic development, environment and tourism (a regression from an unqualified opinion the previous year).

The key reasons why the province did not obtain its ideal clean audit were, according to Strydom, lack of competencies, lack of consequences for poor performance and irregularities and the slow response by political leadership.

“Recommendations of the AG are not taken seriously,” he said.

“Some recommendations have been made to some departments ever since 2008. In some incidences Scopa needs to do a lot of work.”

Strydom said the department of health showed some success in the transforming of skills, the public works department showed no evidence of skills having been transferred and the department of education had not yet started with a transformation process.

AUDIT OUTCOMES EXPLAINED:

• Unqualified opinion (clean opinion): an opinion is said to be unqualified or clean when the Auditor-General (AG) concludes that the financial statements give a true and fair view in accordance with the financial reporting framework used for the preparation and presentation of the financial statements.

• Qualified opinion: issued when the AG encountered one of two types of situations which did not comply with generally accepted accounting principles (GAAP), but the rest of the financial statements were fairly presented.

• Adverse opinion: issued when the AG determines that the financial statements of an auditee are materially misstated and, when considered as a whole, do not conform with GAAP. It is considered the opposite of an unqualified opinion.

• Disclaimer: issued when the AG could not form an opinion, and consequently refuses to present an opinion on the financial statements. This type of report is issued when the AG tried to audit an entity but could not complete the work due to various reasons, and as a result does not issue an opinion.

• Outcomes with findings: the presence of findings in an audit report indicate significant errors or risks in the entity’s financial information.