by Africa Boso

Consultants too costly

Deputy AG calls for tighter controls

Deputy Auditor-General of SA, Kimi Makwetu.
Kimi Makwetu - DAG-1.jpg

The government needs to implement stricter controls to get the best value for money for services provided by external consultants to the public sector, South Africa’s deputy auditor-general, Kimi Makwetu, said.

Addressing the media at the release of the AGSA performance audit report on the use of consultants at selected national departments, Makwetu said that the partnership between the private and public sectors has become important in driving South Africa toward its development goals; however, the report identifies areas that need to be controlled when engaging in these partnerships to get the best value for money.

What are performance audits?

Performance audits, in essence, seek to determine whether money was well spent by auditees. These are discretionary audits that do not include an audit opinion.

Performance audits are not limited to annual information, but can cover more than one financial year and concentrate on whether goods and services were acquired economically, applied efficiently and managed effectively toward achieving the desired goals.

Past performance audits on the use of consultants

In 1996 and 2002, the AGSA conducted performance audits on the use of consultants by government.

The main findings of those audits related to acquisition and appointment processes; the monitoring and control of consultants; the departments’ responsibility to create an environment conducive for consultants to work effectively; and the implementation of deliverables.

The National Treasury and the Department of Public Service and Administration issued various guidelines and regulations to improve the overall management and use of consultants. Despite these, many weaknesses still exist.

What did the latest performance audit cover?

The latest AGSA performance audit on the use of consultants, which covers the past three financial year was conducted at eight national departments and included 124 contracts with an estimated value of R5.5 billion.

The departments were selected based on assessments by the AGSA of possible weaknesses in the use of consultants, as identified through other audits, as well as spending trends within departments.

The eight departments were Correctional Services, Defence, Environmental Affairs, Health, Rural Development and Land Reform, Police, Transport, and Water Affairs.

Total expenditure on consultants

The total expenditure on consultants by the eight audited national departments amounted to R24.6 billion (74% of the total national expenditure of R33.5 billion on consultants) for the three-year period 2008–09 to 2010–11. Although 20% of the national departments were selected for audit, they represent 74% of the total expenditure on consultants over the three years.

Similar audits were conducted at the various provinces, which spent R68.5 billion on consultants over the three years. Province-specific reports will be tabled in all provincial legislatures before the end of the second quarter of 2013.

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