Speaking notes for the auditor-general at the 24th SAAPAM Annual Conference

24th SAAPAM Annual Conference – 22-24 September 2025

“Confronting the Public Sector Financial Crisis: Leadership, Accountability and the Path Forward.”

Date: Tuesday, 23 September 2025, Venue: Premier Hotel, Thohoyandou, Limpopo

Programme director

Prof Kgothatso Shai, President of SAAPAM

Fellow panellists

Distinguished guests

The 24th SAAPAM conference presents an opportunity for the country to hold a mirror and reflect on the direction we are taking. Thank you for the opportunity to be part of this important conversation.

South Africa is undergoing economic challenges, with growing demands for service delivery. These challenges require urgent attention from all roleplayers in society. This is primarily why as the AGSA, we call on all roleplayers, both with moral and legal authority to exercise their duty to the country and act in a complementary manner to address the challenges we face.

These challenges include:

• For the past three years, the country’s gross domestic product (GDP) growth has been consistently downgraded. This downturn reflects policymakers’ reluctance to address persistent issues, such as infrastructure decay and fiscal strain, which have worsened over time and turned into a formidable challenge
• Infrastructure projects lacking funding as well as paucity of maintenance
• Runaway unemployment now at 33.2%, according to Statistics SA, but the figures show that women continue to carry a heavier share of this burden. The unemployment rate for women was 35,9%, compared to 31,0% for men, a gap of 4,9 percentage points
• Youth unemployment at 46,1% in the second quarter of 2025
• Crime with murder rates above that of countries at war
• Stagnant economy not able to increase employment
• Skills mismatch as a result
• Shrinking fiscus which has resulted in a number of government service delivery programmes taking a back seat
• Constrained water and energy supply (thought the latter seems to have improved with loadshedding not as endemic as it once was)
• State-enterprises that cannot support developmental trajectory: Transnet unable to move the kind of tonnage that is produced, water boards facing liquidity challenges as a result of not being paid for services rendered by municipalities
• Growing demand for limited services like housing, health, educational opportunities 

There is no single panacea to address all these challenges but effective governance marked by performance, transparency, accountability and integrity as well as meaningful public participation could serve not only to build trust between the state and its citizens, but also demonstrably lead to improved service delivery that is citizen-centric.

At the centre of building this trust, are institutions that foster predictability: for example, when citizens recognise an electoral institution that makes it possible for the will of the people to be reflected in choosing or disposing of leaders or an institution that investigates and fairly metes punishment on those who transgress the socially-accepted laws.

The Auditor-General of South Africa (AGSA) is one of those institutions whose role is to support democracy by auditing all government institutions, thus giving citizens a measure of whether funds are used for the stated and intended purpose, and if not, what ought to be done to remedy that.

We provide credible, independent, and evidence-based audit outcomes. It is up to the broader oversight ecosystem, to act on our findings. We do our part to refer matters to law enforcement institutions for further investigation.

Institutions, understood as organisational structures and rules that guide political, economic and social interactions are indispensable for fostering the conditions for a state’s success. Well-functioning institutions, argues Francis Fukuyama3, can support the rule of law and create a framework within which individuals can predictably engage in economic and social activities, thereby fostering sustainable growth and development.

Public institutions in general are under pressure and the economic realities have added more budgetary pressures. The public fiscus is shrinking against growing demands that impact on the lived realities of citizens of our country, e.g. schools, social services etc. Despite the financial constraints, departments, municipalities and other public entities are still in financial distress and spending quality does not take into account the precarious financial reality. Below is the picture we presented when tabling the PFMA general report.

What does this say?

Over a period of five years, despite the findings and recommendations by the AGSA, our 2023-2024 findings show that spending not in line with the principles of good governance continues unabated. Over a five-year period (2019-2024), fruitless and wasteful expenditure has continued and has reached R10.3 billion.

Unauthorised and irregular expenditure is at R38,8 billion.

Financial health is just as compromised and the reasons are clear: poor payment practices, unfair and uneconomical procurement practices, inadequate needs analyses and project management, no or limited benefit from money spent and fraud.

At local government level, the picture does not look any better.

Despite and in spite of the above-mentioned challenges, the quality of spend by the public service leaves much to be desired.

This suggests that the well-thought-out remedies and recommendations are not being implemented. This was the reason for the AGSA to be afforded more powers – to improve the enforcement aspect of the recommendations and findings. We have implemented our powers in terms of material irregularities but the systemic failures remain the order of the day.

Programme director,

Material irregularities (MIs) refer to non-compliance with, or contravention of, legislation, fraud, theft or a breach of a fiduciary duty identified during an audit performed under Public Audit Act that 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.

The MI process has enabled accounting officers and authorities, executive authorities and Parliament, legislatures and municipal councils to be more effective in preventing and dealing with irregularities and their resulting impact. It has also resulted in holding executive and accounting authorities accountable for the wastage that happens under their watch.

As a result of this process, we have been able to recover much needed funds back to the fiscus. At the municipal level, we have been able to prevent loss or recover (R1,32 billion). At provincial and national level, we prevented R1,45 bn of loss, recovered R0,86 bn and in the process of recovering some R1,08 billion.

Some of the reasons why the MI process is not yet having the desired impact in local government include instability in accounting officer positions; a slow response by accounting officers to our notifications, recommendations and remedial actions; prolonged investigations or delays in concluding criminal proceedings; and delays in disciplining officials. Where we escalate the non-responsiveness to mayors and provincial government leaders, it is rare for them to act or for their actions to have a significant impact.

At national level while there is better responsiveness overall, unresolved MIs stand at 52% of the 292 material irregularities we have identified since 2019. We believe the response could and should be better.

We continue to implore executive authorities including mayors to oversee a better response to the MIs that we have raised.

Enhancement of our powers also provide us with better leverage to collaborate with law enforcement organisations. Consequently, we work closely with the Directorate for Priority Crime Investigation (DPCI) (Hawks) for investigations into identified infractions as well as the Special Investigations Unit.

Our institutions bring a sense of predictability – that once an issue which has serious consequences for the citizens is identified, it is taken seriously and addressed. Our role, alongside other institutions is to hold those who have a role to play or responsibility for service delivery accountable in fulfilling their constitutional and legislated mandate.

As an example, one of the MIs is in relation to the department of military veterans, which, in March 2021 provided emergency housing to military veterans who were not eligible for such housing, resulting in an estimated financial loss of R5,74 million. We notified the accounting officer of the MI in December 2022, and they responded that certain employees had been identified for disciplinary action but did not provide evidence to support this claim. The accounting officer was suspended in March 2023 for other non-compliance matters and an acting accounting officer was appointed in May 2023 on a month-to-month basis. We reissued the notification in June 2023 and allowed time for appropriate steps to be taken by the acting accounting officer, but appropriate actions have still not been taken. We have since referred the matter to the Special Investigating Unit in September 2024 for further investigation.

At local government level, we have raised a number of MIs with regard to the harm the public is suffering as a result of pollution of water, poor management of waste landfill sites as well as poor management of wastewater treatment works. These examples have a real impact on the health of citizens who live around these areas.

The role of oversight

Leadership of various departments, institutions, entities need to play their role in ensuring oversight. In fact, the entire accountability ecosystem should play its different roles to ensure that not only is there consequence management but also that there is collaboration between various players.

The political leadership has a role to set the right tone and drive the culture of change, the culture of servant-stewardship. Other oversight levels like Parliament and various committees should also play a role in holding the executive to account for their areas of responsibility. We interact with all roleplayers, especially at the political level. We share our findings and recommendations but it can be a self-defeating exercise without the commitment to hold each layer of the accountability ecosystem responsible. We expect leadership not only to cascade down the results of those interactions but also to hold officials accountable for their action or inaction.

At local government level where the impact of lack of efficient service delivery is felt the most, municipal managers, mayors, councils must play their role.

But, national and provincial government must also play a more active role in ensuring that local government delivers in the way that it needs to. After all, the ripple effect of local government has a wider impact. Parliament and the provincial legislatures should be diligent in their oversight and take decisive action on municipal failure to effect a change on local government.

The PFMA +gives national and provincial government and the legislatures the tools to ensure that the required corrective action is taken – and even to intervene where necessary and where troikas in provinces have actively supported municipalities, we have seen a change e.g. in the submission of financial statements.Part of the ecosystem includes non-state actors, organisations and interests groups that have a desire to see change and progress and their role is just as crucial in representing citizens. These civil society organisations add a crucial voice and it has been our call that we urge departments, municipal councils and all state actors to embrace their views.

We all have a role to play and if and when all of us do so, we will begin to see the desired change.

Professionalisation of the public service

Ladies and gentlemen,

It is one thing to demand and expect good governance. It is critically important that the people who are expected to provide good governance have the commensurate skills and experience to do their jobs correctly.

It is expected that some mistakes can occur and these can and should be fixed as long as they are not intentional. Lack of technical knowledge rather than ill-intent could be behind some of the shortcoming of the public service.

This is why this forum, spearheaded by the South African Association of Public Administration and Management, has such a pivotal role to play in driving a concerted effort to address skills and capacity gaps and implement public-sector wide professionalisation initiatives. All roleplayers should strive towards a future in which the public service and serving in government is a career of choice for professionals and where scarce skills can thrive and be retained.

Conclusion

We all have a role to play to make our country what we want it to be – a home for us all and a home that our generations will be happy to inherit. These series of conversations should result in something tangible, something that next year or after, we could point to the genesis of a different way of doing things.

That is a challenge that I throw out whenever I get the opportunity; because if we don’t, history will judge us harshly.

Thank you,