New Audit Amendment Act

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The New Audit Amendment Act came into effect on 1 April 2019 to foster Good Governance. This amendment was necessitated by non-action by the executive and lack of accountability in implementing corrective actions. The continuous sharp increase in fruitless and wasteful expenditure (R4.16 billion over five (5) years) and irregular expenditure and more disappointing adverse audit outcomes demonstrate the local government’s decay.

The expenditure resulting from wasteful and fruitless expenditure incurred by the government has proven to be costly. Most recently, we have witnessed a surge in corruption as a result of control weaknesses. Therefore, the rise in corruption has resulted in short-changing the south African citizens by not delivering appropriate services to the public, as promised by political parties in their manifestos and, more critically, by the ruling party.

This new amendment is a game-changer that forces the accounting officers to perform their duties as per applicable prescripts such as PFMA or MFMA or any other relevant legislation.

What does the new Audit amendment mean to the accounting officer?

This new amendment poses a new risk to the accounting officer who fails to implement adequate and effective controls to reduce material irregularities’ exposures. There are increased risks for the accounting officer position, which calls for ethical and robust and courageous individuals. Therefore, this calls for individuals not easily swayed to do unethical things but remain strong to do what is right.

This new amendment will present us with the new kind of an accounting officer, as this role is becoming essential to drive an improved control environment.  Failure to act by the accounting officer will result in them being issued with the certificate of debt due to their inaction to act on material irregularities.

In response to the above statement, a quote from Jairam Ramesh,

“There never is a good time for tough decisions. There will always be an election or something else. You must pick courage and do it. Governance is about taking challenging, even unpopular, decisions.

Furthermore, the net is closing for all those who continue to plunder government resources. This amendment is likely to change behaviour and improve the overall governance systems. Accounting officers need to be courageous to take the necessary steps to reverse the impasse. I hope that the new audit amendment will improve the governance system, reducing wasteful and fruitless expenditure by various departments. One of the crucial measures to be taken will be punitive actions taken to all accounting officers who failed to ethically and professionally exercise their duties.

Time is now to improve governance, and the accounting officer’s need to be courageous to act against any wrongdoing.