Article contributed by Azania Matiwane and Bonakele Ncemane.
The Auditor General (AG) has recently released a report on the audits of the Eastern Cape (EC) province. These reports follow the Public Finance Management Act ( PFMA) which is a prudence tool for management of financial affairs and governance of the public sector. The AG report revealed a positive shift in financial governance where the EC provincial government and its entities received 15/25 (60%) 2022/23 clean audit outcomes , this is a significant improvement compared to 14/25 (56%) 2021/22 and 8/25 (32%) 2020/21 outcomes in the previous cycles respectively.
Among the 15 clean audit outcomes obtained by the provincial government, three entities, namely: the Eastern Cape Gambling Board (ECGB); Liquor Board (ECLB); and Socio-economic and Consultative Board (ECSECC) were audited using the “limited assurance” method as a methodology, they were included in the audits with no findings identified, showcasing a commitment to clean governance. This echoes and highlights strong leadership and the ongoing journey towards enhanced accountability in the Eastern Cape’s financial landscape.
Clean audits alone aren’t sufficient when services to the people aren’t reaching. However, good financial management is a catalyst for service delivery. Accordingly, the leadership of the Eastern Cape as lead by the Premier Lubabalo Oscar Mabuyane has to be commended for notable significant financial management improvements. They should further be urged to translate the financial management prudence to services which would effectively change peoples lives.
The Eastern Cape which is mainly a rural province, much like other rural provinces in South Africa can only attract investments to the province through showing prudent financial management and good governance. These as key ingredients for investors who would like to take up opportunities in the province. The more the leadership show seriousness to improve its management of provincial finances and governance of its entities, the more it gets attractive to investors, whom interpret such as an indication of a province that is ready and open for business.
More importantly, the AG audit outcomes report on Eastern Cape, should serve as an affirmation to the residents of prudence of decision making of the leadership. This is an important factor to inspire hope to residents that, their provincial government is not only conscious of the limit of resources, however more importantly they being utilised for maximum impact to the people.
It should go without saying, that the regressive departments should be followed by strict consequences both at leadership, management and administration. This so as to discourage other well functioning departments from regression while at the same time encouraging effective leadership and management of the regressive departments.
It is no doubt that the financial performance of Eastern Cape provincial government hails a new era of accountability and responsive leadership which should be maintained going forward. If the Eastern Cape provincial government maintains and improves from this, it’s only a matter of time before it can be a South African case study on eradication of poverty, unemployment and addressing backlog of service delivery.
Is a risk and governance expert, an activist philanthropist and an independent non-executive director of an alternative asset manager specialising in private equity and mezzanine solutions, writing in his personal capacity.
Bonakele Ncemane CA(SA)
Is a member of Institute of Chartered Accountants of South Africa and senior lecturer at the university, writing in his personal capacity.