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The FW de Klerk Foundation welcomes the passing of the Public Audit Amendment Bill (the Bill) by the National Assembly on 29 May 2018. The Bill gives the Office of the Auditor-General (AG) more powers to effectively address maladministration.The Bill will empower the AG to refer adverse findings in its reports to investigative bodies at all levels of government, as well as state-owned entities. 

The specific amendments will permit the Office of the AG to refer gross irregularities to authorities, including the National Prosecuting Authority, as well as the Public Protector, to recover funds lost due to non-adherence to the Public Finance Management Act, from accounting officers. This includes fraud, theft or any breaches of fiduciary duty where significant harm to the general public or a public entity occurs. 

While the enactment of legislation such as the Bill is a welcome development, it is not enough to stem public sector maladministration. It is vital that bodies such as the Directorate for Priority Crime Investigation (the Hawks) have the skill and expertise to investigate and bring to book individuals complicit in maladministration. However, the unanimous passing of the Bill is indicative of Parliament’s recognition of the need to curb public spending, as well as to mete out sanction to those responsible, and is an important step in the right direction. 

In light of the recent findings by the AG, that only 33 of the country’s 257 municipalities received a clean audit in 2016-17, and that irregular expenditure rose 75% to R28.4 billion in 2016-17 (up from R16.2 billion the previous year), it is hoped that the Bill’s introduction could slow the deterioration in municipal finances.

The Bill will now be referred to the National Council of Provinces (NCOP) for concurrence.

Issued by the FW de Klerk Foundation
29 May 2018

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