The chairperson of Parliament’s standing committee on public accounts, Themba Godi, has taken a swipe at private audit firms for prioritising profits over public good when auditing public institutions.
Godi was speaking to City Press on the sidelines of the Institute of Internal Auditors of SA’s national conference held at the Sandton Convention Centre this week.
“Our major problem is with the private auditors because as you know it is not all public entities that are audited by the Auditor-General, the office wouldn’t have that capacity. There are those that are audited by private firms and that is where our major problems are,” he said adding that reports compiled by private audit firms were not very detailed.
“Look at the SABC, the irregular expenditure which now stands at R5 billion only came to light substantively when the Auditor-General took over auditing the SABC, before that, when these private firms [audited], the information was scanty and limited,” he said.
“The Auditor-General is auditing to instil public confidence, not looking for work, not having a contract, so he does his work much more diligently than private firms who would want to see a renewal of their contract when it ends,” he added.
On the current regulations within the auditing space and whether or not more needed to be done to curb unethical practices, Godi said there wasn’t much checks and balances could do unless they were based on lessons learnt.
“There’s no amount of regulation that can stop people who are determined to do wrong,” he said.
“It is the profit motive that is at the core of these challenges. That is what blinds people to the public good because the profit motive is private appropriation, so it creates that problem, especially when you deal with public institutions,” he said.
He also pointed out that the prevalent negative audit outcomes in public institutions were because management limited its scope in internal audits and was unresponsive to the results.
“Primarily because of two things, one you have weak internal audit or secondly, you have management that does not respond to their finding.
He said the internal audits were “weak” because they were instituted by management itself which was likely to limit their scope and not “delve into the dark corners”. “Only the Auditor-General comes and shines light into those dark corners,” he said.
Godi said leadership in public institutions was also a major concern and singled out the department of water and sanitation as one which did not have leadership and was seemingly on autopilot.