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All departments and entities in the Gauteng Provincial Government tabled their 2024/25 Annual Reports at the Gauteng Provincial Legislature. This was done in compliance with Section 40 of the Public Finance Management Act, Act 1 of 1999.
These Annual Reports provided a consolidated view of the financial position, financial performance and the cashflow of each department in the Gauteng Provincial Government for the 2024/25 financial year. This information is important as it demonstrates government’s commitment to transparency and accountability to citizens.
Included in each of the Annual Reports that were tabled at the Gauteng Provincial Legislature is the Report of the Auditor-General, the supreme audit institution of South Africa, which assessed how each department spent public funds in the 2024/25 financial year. This independent assurance is done in line with the commitment to improve the management of finances and promote transparency and accountability in the public sector.
Overall, in the 2024/25 financial year, most of our departments and entities achieved clean audit opinions, a clear indication that significant progress has been made to improve financial management and ensure that public funds are utilised for what they are meant for: to deliver services to citizens of Gauteng.
However, we remain concerned about the continuous rise in irregular expenditure, which occurs when departments do not adhere to supply chain management rules and regulations when procuring goods and services. Provincial Treasury continues to work closely with departments to curb irregular expenditure by strengthening supply chain management capacity.
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Categories of audit outcomes
Before we get into the analysis of audit outcomes for the 2024/25 financial year, let me briefly explain the categories of audit opinions that we are discussing in this media statement and what each of these mean:
Clean Audit – means the Annual Financial Statements of the auditee are free of material misstatements (financially unqualified audit opinion) and there are no material findings on the report on performance against predetermined objectives or compliance with key laws and regulations;
Unqualified Audit – means the Annual Financial Statements contain no material misstatements, with findings raised on either reporting on predetermined objectives or non-compliance with legislation, or both these aspects.
Qualified Audit – means the Annual Financial Statements contain material misstatements in specific amounts or there is insufficient evidence for the auditor to conclude that specific amounts disclosed in the financial statements are not materially misstated;
Adverse Opinion – means the Annual Financial Statements contain misstatements that are not confined to specific amounts, or the misstatements represent a substantial portion of the financial statements; and
Disclaimer Opinion – means there was insufficient appropriate portfolio of evidence (documentation) on which the auditor could base an opinion concerning the items reported in the Annual Financial Statements. The lack of sufficient evidence is not confined to specific amounts or represents a substantial portion of the information contained in the financial statements.
ANALYSIS OF THE AUDIT OUTCOMES
Departments
A total of eight (8) departments achieved clean audit outcomes in the 2024/25 financial year and those are: Office of the Premier, Provincial Legislature, Provincial Treasury, Cooperative Governance and Traditional Affairs, e-Government, Economic Development, Community Safety and Roads and Transport.
It is important to note that four (4) of the eight (8) above-mentioned departments, namely, OoP, GPT GPL, and COGTA have sustained these clean audits for at least five consecutive years. This is an indication of stable and effective leadership that is focused on upholding clean governance.
In the 2024/25 financial year, the following departments: Infrastructure Development, Agriculture and Rural Development, Social Development, Health and Human Settlements remained stagnant on unqualified audit opinion with findings mainly due to issues of non-compliance with laws and regulations.
In the same period, two departments have regressed with Education losing its clean audit and receiving an unqualified audit opinion whilst Sports, Arts, Culture and Recreation moved from an unqualified to a qualified audit opinion.
Overall, the analysis of the audit outcomes of 2024/25 showed that Department of Health was the only department with non-compliance across all areas due to lack of effective internal control environment. Across the departments that received unqualified audits
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(Health, Human Settlements, Infrastructure Development, Agriculture and Rural Development and Social Development), non-compliance with expenditure management and supply chain management laws and regulations was common, which led to increased instances of Irregular Expenditure.
Consequence management remained an issue for 50% of these departments meaning that Accounting Officers did not implement recommendations from completed investigations. Material misstatements in the annual financial statements was an issue for 50% of these departments, which indicates weak internal controls and lack of adequate management reviews in the financial reporting processes.
Entities
Turning to public entities, I am pleased to announce that fourteen (14) out of nineteen (19) entities achieved clean audit opinions, these are: Gauteng Infrastructure Financing Agency, Gauteng Film Commission, Gauteng Growth and Development Agency, Supplier Park Development, Constitutional Hill Precinct, IDZ Development Company, Gautrain, Gauteng Liquor Board, Cradle of Humankind, Dinokeng, Gauteng Gambling Board, Transport Authority of Gauteng, Gauteng Partnership Fund and Gauteng Enterprise Propeller.
The Medical Supplies Depot sustained an unqualified audit opinion during this period. However, G-Fleet Management, Innovation Hub and Gauteng Tourism Authority regressed to unqualified audit opinions during this period. We are very concerned that the situation deteriorated further at the Housing Fund which regressed from an adverse to a disclaimer in the 2024/25 financial year.
The key issues raised by the Auditor-General on the five (5) entities were non-compliance on annual financial statements because of weak internal controls and lack of adequate management reviews in the financial reporting processes. Three (3) entities were non-compliant with expenditure management and supply chain management prescripts, which led to increased instances of Irregular Expenditure.
Consequence management remained an issue for Medical Supplies Depot due to lack of implementation of recommendations from completed investigations from the Department of Health. Non – implementation of consequence management also led to Irregular Expenditure that could not be condoned during this period.
INTERVENTION TO IMPROVE AUDIT OUTCOMES
The Provincial Treasury is fully committed to working closely with departments and entities to ensure transparency and public accountability in the province by implementing credible financial controls with the goal of realising 100% clean governance.
To address the challenges related to material misstatements in the annual financial statements we will, amongst other things, review audit action plans to ascertain that these are aligned to the findings and conduct monthly reviews of Public Financial Management Act Section 40 disclosure notes.
Furthermore, we will review annual financial statements prior to submission to Audit Committees and the Auditor-General for audit, provide training in identified areas of weakness during the monthly and interim reviews, and to facilitate full utilisation of SAP procure-to-pay and Asset Management Systems to ensure complete and credible financial information.
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PAYMENT OF SUPPLIERS
The Gauteng Provincial Government is committed to paying suppliers’ invoices within 30 days, as prescribed in Section 38(1)(f) of the Public Finance Management Act (PFMA), read with Treasury Regulations 8.2.3.
In the 2024/2025 financial year, the provincial government successfully paid 192,718 invoices amounting to R48.9 billion. This resulted in 97% of suppliers being paid within the 30-day timeframe. Office of the Premier, Roads and Trasport, Community Safety, Economic Development, e-Gov, and COGTA paid 100% of all invoices within 30 days. The Provincial Treasury achieved (99.75%), Sports (99.5%), Human Settlements (99.5%), Social Development (99%), Infrastructure (94.25%), Education (93.5%) and Agriculture was at (71.95%.). The Department of Health on average paid 37% of invoices within 30 days in the year under review due to historical accruals.
UNATHORISED, IRREGULAR, FRUITLESS AND WASTEFUL EXPENDITURE
In the 2024/25 financial year, GPG departments incurred R4.2 billion in new irregular expenditure.
The province is dedicated to enhancing compliance with supply chain management regulations by automating supply chain management processes related to tenders and RFQs. We want transparency and accountability regarding procurement and contract management in the province to enhance compliance, fight against fraud and corruption and to protect the public purse.
CONCLUSION
Improvement in financial management in the public sector leads to better service delivery, because funds are used for what they are intended for. Our people expect us to build an accountable and clean government that can serve them better. This is what we are focused on doing. We are a responsive people-centred government that is transparent and, on the ground, to improve services to the people.
INFO SUPPLIED.