The Auditor-General of South Africa (AGSA) Tsakani Maluleke says all too often infrastructure delivery projects which have been delayed, are costing more than what was initially planned or are of poor quality.
In the 2022-23 financial year, the AGSA audited 137 infrastructure projects, focusing on critical infrastructure, including health facilities, schools, housing, roads and railways, water infrastructure, and government buildings such as police stations.
“Our audit work incorporated numerous site visits by our multi-disciplinary audit teams, who applied their expertise to inspect project progress and quality. We reported findings on 112 (82%) of the projects that we visited. There are also delays in newly built infrastructure,” Maluleke said.
She said when auditees, especially high-impact auditees, do not properly manage their performance, finances and infrastructure; it directly affects the delivery of key government programmes that are intended to improve the lives of South Africans and to alleviate hardships stemming from tough economic conditions and poverty.
“Wasted money and resources means reduced funding for service delivery programmes and, eventually, a greater burden on taxpayers,” the AG said.
She made these remarks in Parliament on Wednesday, while tabling the 2022-23 general report for national and provincial departments, their entities and legislatures.
Maintenance of government properties
Maluleke noted that many government properties are in a poor condition because of the sector’s reactive approach to maintenance.
“Most maintenance work is only done in response to emergency requests and little time or budget is spent on preventative maintenance,” the AG said.
The public works sector is responsible for maintaining government properties, including health facilities, police stations and buildings that accommodate departments.
She said government officials and the public continue to use properties that are in poor condition, which lowers the effectiveness of the working environment and puts the safety of officials and the public at risk.
“There are currently 2 394 unoccupied government properties, most of which have not been maintained and are in a bad state. Even though these properties are not used, costs such as property rates and taxes still need to be paid.
“When there are not enough fit-for-use properties available to departments, the Property Management Trading Entity needs to enter into lease agreements – which could have been avoided if properties had been properly maintained,” Maluleke said.
The AG further cautioned that such lease agreements are often costly to government because of high annual increases and higher-than-average market rates being paid.
She attributed the failures in delivering, maintaining and safeguarding infrastructure to four matters that need urgent attention:
- Inadequate coordination and collaboration, and deliverables not being synchronised in the ecosystem (e.g. between implementing agents and other departments).
- Failure to conduct proper needs assessments and feasibility studies; or conducting them but not using them as a base to implement the infrastructure projects.
- Lack of accountability – the terms of construction contracts are not used to hold contractors and professional service providers (consultants and implementing agents) accountable when they do not perform.
- Inadequate monitoring and enforcement by infrastructure-related regulatory bodies such as the Construction Industry Development Board and the National Home Builders Registration Council, particularly relating to repeat offenders that cause delayed projects across sectors.
Audit outcomes of service delivery auditees and key public entities
The AG said the 193 high-impact auditees generally have poorer audit outcomes than other auditees and struggle with performance, financial and infrastructure management.
These high-impact auditees comprise departments, public entities and state-owned entities that are collectively responsible for 85% (R2.64 trillion) of the expenditure budget.
They contribute to delivering health services, skills development and employment, infrastructure development, safety and security, water and sanitation, energy, and environmental and financial sustainability.
“Auditees from this group also account for 48% of all outstanding audits and 65% of all modified audit opinions; in other words, qualified, adverse and disclaimed opinions. In total, 139 of the 193 high-impact auditees were required to report on their performance in 2022-23,” she said.
Those excluded were the 50 technical and vocational education and training colleges, the Property Management Trading Entity, Water Trading Entity and Commission on Restitution of Land Rights, whose performance is reported in the performance reports of their parent departments.
“We raised material findings on the reported performance information of 127 (42%) of these auditees, as well as material findings on compliance with key legislation at 76% of the 178 auditees with completed audits.”
Call for improvement in service delivery
The AG has called for improved service delivery enabled by capable, cooperative, accountable and responsive institutions delivering on their mandates.
“At a time of economic hardship in which the public’s demands for service delivery and accountability are increasing, there is an expectation that national and provincial government will do everything in their power to get the most value from every rand spent and to manage every aspect of their finances with diligence and care.
“This is, however, not what we have seen at some departments and public entities during our audits. Improved service delivery and the responsible use of the limited funds available will only be possible when we have capable, cooperative, accountable and responsive institutions that deliver on their mandates.”
She urged all roleplayers in the accountability ecosystem, particularly those with direct control over service delivery, to work deliberately and with urgency towards achieving a culture of accountability, transparency, integrity and improved service delivery for all South Africans.
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