Weak controls lead to public sector initiatives failing

Auditor-General calls for accountants to restore trust in the profession.
AG, Tsakani Maluleke. Image: Supplied

Government needs to strengthen its management of public finance systems in order to ensure that South Africans will benefit fully from the social initiatives put in place to serve them. This is according to Auditor-General (AG) Tsakani Maluleke, who was a keynote speaker on day one of the Southern African Institute of Government Auditors’ (Saiga’s) first-ever conference.

Maluleke’s call to improve the functioning of public institutions comes after President Cyril Ramaphosa in his weekly letter announced government’s social employment fund which seeks to create about 50 000 part-time jobs for the country’s over seven-million unemployed.

Government says it will pour R800 million into the employment fund – the second phase of government’s presidential employment stimulus – founded as a response to the coronavirus pandemic in the country.

According to government, the social employment fund is meant to both agitate job creation in community-based and non-governmental organisations and get people involved in serving their communities.

“No less than 80% of the funds received needs to be spent on wages. This will ensure that the work supported by the fund is labour intensive, provides meaningful experience and delivers real social value,” Ramaphosa said in his weekly letter.

“Social employment is not about work alone, but about creating high-quality assets and services for communities,” Ramaphosa said.

However speaking at the Saiga conference, Maluleke said that her office in its previous engagements with government institutions found that weak controls to government processes and the inability to collaborate and coordinate efforts between government entities not only sets the government back but robs South Africans of the full benefit of these initiatives.

“What we found through these audits is that government institutions don’t operate in a well-coordinated manner, which is a key success factor if we are to attain the gains that we must and deal with the challenges that the president set out earlier on just before I spoke,” Maluleke said.

Maluleke also said that reflecting back to difficulties the country faced with regards to the procurement of personal protective equipment proved that weak controls in procurement processes make it easier for things to fall through the cracks.

“Prevailing controls of our procurement systems and processes were weak and therefore vulnerable to abuse and this resulted in instances of fraud and resource leakages,” Maluleke said.

“Governments information systems were also not agile enough and databases of government were not integrated and this resulted in funds not reaching their intended beneficiaries at the time that it was needed most,” Maluleke said.

Maluleke went on to urge Saiga members to play their role in restoring the reputation of the auditing sector by adopting an activist approach to their work that [should] seek to serve South Africans first and attract investment to the country.

“I believe that if we are to build-back better, we must by start by restoring trust in our accountancy profession,” Maluleke said.

“It’s time that we actually shift out of that space and see the progressive and sustainable changes that are required for us to strengthen the accountability, the transparency, the integrity [and] the performance of public sector institutions so that those institutions deliver value and benefits to citizens.”

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Thank you some rational perspective: “Government says it will pour R800 million into the employment fund – the second phase of government’s presidential employment stimulus – founded as a response to the coronavirus pandemic in the country.”

If I as a business start-up or funder invests R800 million or R8 million in an enterprise, I expect a return on capital higher than inflation, say 5%, and higher than my borrowing rate from a finance institution, so let’s be nice and say I need a ROC of at least 10% simply to stay in business.

If all I’m doing is “paying wages”and not creating productivity and growth on capital invested, I’m not a business but a taxpayer funded charity. This is why the pseudo-socialist/communist management of the SA economy has been an abysmal failure.

Those govt employment schemes, the EPWP, Expanded Works Program, and the CWP, Community Works Program are absolute waste of money.
Poorly supervised, doing hardly anything, and certainly not anything useful.
Better to spend it on proper infrastructure like completely resurfacing potholed roads.

Wow! what amazing, unique, progressive advice…(NOT..) We all know this already.. come one

End of comments.

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