Alameen Templeton
1 minute read
15 Aug 2013
6:00 am

Auditors struggle to make a difference

Alameen Templeton

The auditors' auditors have been left a little red-faced with the release of the Auditor-General's report on auditing standards in local government, showing they've lost ground significantly since the formation of the Public Sector Audit Committee Forum (PSACF).

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Formed in 2011, the PSACF was supposed to improve compliance with laws and government regulations and ensure proper reporting on service delivery information. Instead, local government for the audit period 2011-2012 (the first year of the PSACF’s existence) registered a staggering 94% (321 out of 338) of audited organisations as “materially non-compliant with legislation”, PSACF wailed yesterday.

The press of auditors doesn’t seem to have made a difference – more than 82% of organisations whose financial statements were inadequate had audit committees and audit units, the PSACF said.

The SA Chamber of Commerce and Industry said yesterday the findings tallied with its surveys; the municipal delivery component in its Business Confidence Index had been negative since its inception in 2010, it noted. SACCI said: “It is worrisome that businesses are receiving such a low return on investment at a local level for their tax contributions,”

Claudelle von Eck, from Iasa and a forum member, blamed the continued decline on “wrong” appointments, auditors lacking necessary seniority, a general ignorance of the purposes of auditing, and “resistance to internal audit’s presence and recommendations, as well as intimidation to sweep findings under the carpet”.

Sheralee Morland, president of the Institute of Risk Management South Africa adopted a more back-to-basics approach. Research was needed to ascertain “to what extent all key role players in local government understand their respective responsibilities”, she said. Only then could scorecards, performance measurements and indicators be implemented, she added.

It may be time the PSACF stepped up its work rate: since its inception in 2011, the PSACF had issued “one guidance paper relating to the numerous challenges facing public sector audit committees”, Senior Governance Specialist Parmi Natesan said.