Chapter 9 of the Constitution of the Republic of South Africa, 1996, established the Auditor-General of South Africa (AGSA) as one of the state institutions supporting Constitutional democracy. The Constitution entrenches our independence by making us subject only to the Constitution and the law.
The Constitution also instructs that we be impartial, exercise our powers and perform our functions without fear, favour, or prejudice.
We therefore have a Constitutional mandate and, as the Supreme Audit Institution of South Africa, exist to strengthen our country’s democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence.
What are the functions of the AGSA?
The AGSA audits and reports on the accounts, financial statements and management of:
- All national and provincial state departments and administrations
- Administration of Parliament and of each provincial legislation
- All municipalities and municipal entities
- All constitutional institutions
- Any other institution or accounting entity required by national or provincial legislation to be audited by the AGSA.
What types of audits does the AGSA conduct?
Mandatory audits and discretionary audits.
Mandatory audits:
Regularity audits
- Report on the financial statements and the performance report
- Report on compliance with laws and regulations
Discretionary audits:
Investigations
- Report findings with regard to financial misconduct, maladministration and impropriety; based on allegations or matters of public interestPerformance audits (including environmental audits)
- Report on the economic, efficient and effective utilisation of scarce resources
- Report on the effect of policy implementation excluding policy evaluation
What is the extended mandate of the AGSA?
The AG has the power to:
- refer material irregularities to the relevant bodies for further investigation in accordance with their mandate
- take binding remedial action for failure to implement the AG’s recommendations regarding material irregularities.
- issue a certificate of debt for failure to implement the remedial action if financial loss was involved.
What is a material irregularity?
A material irregularity (MI) is any non-compliance with, or contravention of, legislation, fraud, theft or a breach of a fiduciary duty identified during an audit performed under the Public Audit Act (PAA) which resulted in or is likely to result in a material financial loss, the misuse or loss of a material public resource or substantial harm to a public sector institution or the general public.
What is the difference between a material irregularity and irregular expenditure?
- Irregular expenditure is expenditure incurred in contravention of, or not in accordance with, a requirement of any applicable legislation.
- An MI is any non-compliance with, or contravention of legislation, fraud, theft or a breach of a fiduciary duty identified during an audit performed under the PAA which resulted in, or is likely to result in, a material financial loss, the misuse or loss of a material public resource or substantial harm to a public sector institution or the general public.
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