The Department of Tourism has received an unqualified audit for the 2021/22 financial year, with a significant reduction in irregular, fruitless, and wasteful expenditure, as well as improved accountability and better consequence management.
This was the message from the office of the Auditor-General (AG) to Parliament's Portfolio Committee on Tourism on Tuesday.
According to the AG, there has been an improvement in the overall audit outcomes of both the Department of Tourism and SA Tourism.
The improvement is attributed to implementing an effective audit action plan. Issues raised in the past about compliance with human resource management recruitment; supply chain compliance; and controls regarding financial record keeping were addressed as part of the audit action plan.
Irregular expenditure decreased from R21.29 million in the prior financial year to R8.6 million in the 2021/22 financial year. About 54% of instances related to a procurement process that was not competitive, 19% was due to the process not having been fair, 17% was not transparent, and 10% not equitable. Nevertheless, it was found that value for money was still received for irregular expenditure incurred.
SA Tourism (SAT) remains the biggest contributor to irregular expenditure, accounting for 79% of irregular expenditure for the year. The irregular expenditure incurred by SAT relates mainly to noncompliance with supply chain management requirements. The AG found this was which due to a lack of preventative controls to ensure compliance with the relevant legislation.
The irregular expenditure incurred at the department was mainly due a multi-year contract declared irregular in the prior financial year and in terms of which expenditure is still being incurred. The department did not have any new instances of irregular expenditure.
The AG would like to see that sound preventative controls are implemented and that there is adequate monitoring of compliance with laws and regulations.
Going forward, the AG wants the department and SAT to focus on achieving a "clean administration" during a given financial year, instead of only addressing findings raised by the AG in the prior year.
"Overall, the financial health for the tourism portfolio has improved when compared to the prior year. This is evidenced by the overall improvement in key financial health indicators at the department and SAT such as available cash reserves and creditors' payment period," states the AG.
SAT also made a profit in the current year compared to the operating loss in the prior year whereas the department maintained its surplus status from the prior year.
"Tourism remains a key driver of South Africa's national economy and contributes to job creation," said the AG. "It is recommended that future employment initiatives be more focused on sustainable job creation."