Cape Town - Government departments and public entities showed "marginal improvements" in the way they managed their finances in the past year, but still incurred hundreds of millions of rands in irregular expenditure.
Auditor General Terence Nombembe
said that a trend had emerged with a movement to "unqualified audit reports" which showed that "some action was being taken".
"We are seeing a trend where there is movement towards unqualified audit reports," Nombembe said ahead of his tabling of the general report on the national audit outcomes report in the National Assembly.
"The trend is a good trend and encouraging enough to see there is some action being taken."
Disclaimers were largely confined to the health, education and public works departments, while the movement towards unqualified reports was being only constrained by two factors.
"These factors relate to the issues of compliance with laws and regulations of government and also issues of reporting properly on service delivery information," Nombembe said.
"Those are the issues that need to be improved in government.
"The vast number of departments are showing a great number of shortcomings in this area."
The report says R831m of irregular expenditure was identified by departments in 2009/10, while R898m of irregular expenditure was identified at public entities.
Some 13 departments and 58 public entities incurred fruitless and wasteful expenditure of R27.6m and R116m respectively.
The report found 26 public entities incurred material losses and impairment of assets of R2.5bn, of which R1.5bn relates to the Petroleum, Oil and Gas Corporation of South Africa.'Marginal improvements'
"The main reasons for impairments were the recoverability of loan amounts and doubtful debtors, assets that had design defects ... and in one instance and impairment of an investment," the report says.
The report found that seven departments - rural development and land reform, government communication and information service, home affairs, Statistics South Africa, correctional services, the presidency, and trade and industry incurred material losses and impairment of assets of R109.7m.
The most significant of these were losses due to R53.3m in fraudulent activities at rural development and land reform.
Of the 35 departments reported in 2009/10, seven improved, seven regressed, nine remained unchanged with qualified audits, nine remain unchanged with unqualified audits and three showed improvements while obtaining a qualified opinion.
Of the 222 public entities, 52 improved and 28 regressed, 11 remained unchanged with qualified audits, 120 remained unchanged with unqualified audits. The seven others are new public entities.
The department of transport was the only one of the 35 departments to incur unauthorised expenditure - R362.4m on bus subsidies which were paid by the department in compliance with a court order.
Nombembe said there was a tendency for departments and public entities to rely on consultants and not have people "doing some of the work that should be done".
He said the two issues that needed close attention were human resources and improved monitoring of finances.
"The issue of management of human resources capacity we will put on the top of the agenda," he said.
"The second issue is the discipline in monitoring action plans.
"If leadership can do those two things of laying a culture of discipline, with the right tone, it will go a long way to dealing with some of the fundamental reasons why some of these things become repetitive.
"We can look at symptoms and what the outcomes are, but as long as these issues are not being done, we will continue to have the same audit outcomes."
The fact that there had been "marginal improvements" indicated there was potential to have a much more improved performance.