By BAKANG MOKOTO
14 October 2024 – The Standing Committee on the Auditor General engaged with National Treasury on the more than R1 billion in audit fees owed to the Auditor General South Africa (AGSA) by auditees such as financially distressed municipalities. The committee invited the National Treasury to brief it on the interventions to assist the AGSA with regards to the outstanding audit fees, especially audit fees owed by financially unviable municipalities.
The Chairperson of the Committee, Wouter Wessels said the National Treasury explained the current interventions to resolve this issue which could, if not effectively attended to, have dire consequences to the fulfilment of the Chapter 9’s constitutional mandate of overseeing the expenditure and the management of the public purse.
Wessels further said one intervention is to defray excess audit fees from auditees that are in financial difficulty as a direct charge against the National Revenue Fund. He added that a Memorandum of Agreement (MOA) between the National Treasury and the AGSA was signed for the implementation thereof.
“The committee heard that these outstanding fees are due to the constrained fiscal environment. Members of the committee highlighted that municipalities and government entities’ failure to pay creditors within the 30 days as stipulated in the PFMA constitute financial misconduct.
“The committee said the National Treasury should consider deducting the fees owed to AGSA from either the Equitable Share or National Revenue Fund allocated to the provincial budget of the municipality concerned,” said Wessels.
He expressed his grave concern for the lack of clear strategic interventions to deal with the matter at hand. Wessels said what the committee is worried and concerned about is how the outstanding audit fees are increasing and how this can be detrimental to the continued independence of the AGSA.
“The committee said if nothing is done to address the R1 billion audit fees owed to AGSA by some municipalities and government entities now, this amount will easily escalate to more than R2 billion in the next five years.
“The committee called for decisive plans and interventions to address this in order to keep the AGSA independent, and ensure transparency and accountability regarding public funds,” he said.
The Guardian 