By Karabo Marifi
Public Works and Infrastructure Minister Dean Macpherson has announced that his department was unable to meet the legislated 30 September 2024 deadline for submitting its 2023/2024 audit results to Parliament. The delay is due to financial reporting challenges faced by two key entities under the department—the Property Management Trading Entity (PMTE) and the Independent Development Trust (IDT). Both entities were unable to complete their financial statements on time, causing the department to miss the deadline.
Macpherson, who took office three months after the close of the financial year, has assured the public and Parliament that work is already underway to rectify the situation. The department now aims to submit its audited financial results by 30 October 2024. The minister expressed dissatisfaction with the delay, stressing the importance of timely financial reporting and accountability.
Reasons for the Delay: PMTE and IDT Challenges
The primary cause of the delay in submitting the 2023/2024 financial year audit lies with the two major entities managed by the department. Both the PMTE and IDT, which oversee substantial parts of the department’s financial activities, were unable to finalise their financials in time for the deadline.
Minister Macpherson highlighted that the absence of these financial statements would render the overall audit incomplete. “Submitting results without including the PMTE and IDT, which represent large parts of the department’s expenditure, would be irresponsible,” Macpherson stated. He added that these entities were crucial in reflecting the department’s overall financial performance.
The delays have put a spotlight on internal financial controls, audit oversight, and the department’s accountability mechanisms, raising concerns among stakeholders. Macpherson’s announcement acknowledged these shortcomings and pointed to deeper systemic issues within the department’s financial management.
A Culture of Weak Financial Controls and Tender Irregularities
As the department prepares to submit its audit results next month, Macpherson has warned that the report will likely reveal significant weaknesses in internal financial controls, problematic tender processes, and insufficient audit oversight. These issues have long plagued the department, contributing to inefficiencies and mismanagement of public funds.
In his statement, Macpherson did not shy away from addressing the systemic challenges, saying, “The results to be presented for the 2023/2024 financial year are likely to paint an unacceptable culture of weak internal financial controls, problematic tender processes, and insufficient audit oversight.” He emphasised that these issues preceded his appointment as Minister.
Despite the anticipated negative findings, Macpherson expressed confidence that ongoing reforms within the department would help to address these challenges. He acknowledged that the delays and shortcomings were avoidable but assured the public that corrective measures were already in place.
Reforms and Strengthening Financial Accountability
Minister Macpherson outlined a comprehensive reform plan aimed at improving the department’s financial accountability and transparency. Among the key reforms is the department’s enhanced collaboration with the Auditor General of South Africa (AGSA). By working closely with the AGSA, the department aims to introduce more regular evaluations of its financial statements and monitor progress more effectively.
In addition to partnering with the Auditor General, Macpherson revealed several internal measures aimed at preventing the misuse of public funds and ensuring greater oversight. Notably, the department has revoked the authority for officials to spend up to R20 million without the approval of an accounting officer. This move is designed to curb unchecked spending and ensure greater financial scrutiny.
A skills audit has also been initiated at the Senior Management Service (SMS) level. This audit will assess whether the department has the necessary expertise in place to manage its financial operations effectively. Macpherson believes that these reforms will provide a solid foundation for building a stronger and more accountable Department of Public Works and Infrastructure.
Looking Ahead: October 2024 Submission and Beyond
Macpherson has committed to submitting the 2023/2024 audit results by 30 October 2024. He has also emphasised the importance of ensuring that such delays do not occur again in the future. In a letter to the Speaker of the National Assembly and the Chairperson of the National Council of Provinces, Macpherson expressed his frustration with the delay but reassured them that steps were being taken to improve the department’s financial management practices.
The Minister stated, “It would be irresponsible to submit results without including PMTE and IDT. However, action was taken to remedy the situation, and reforms are already underway to start the journey towards financial accountability and improved accounting practices.”
The department’s upcoming audit submission will be closely watched by both Parliament and the public, as it will provide insights into the financial health of the Department of Public Works and Infrastructure. Macpherson has positioned the reforms as a long-term solution to the department’s financial management issues, with the goal of preventing future delays and ensuring greater transparency in government spending.
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