Corruption in state finances: Auditor-General refers 40 irregularities for investigation

The Office of the Auditor-General (A-G) has referred 40 material irregularities picked up during the auditing finances of the organs of state using the powers conferred to her by the amended Public Audit Act.

This emerged on Friday when the Directorate of Priority Crime (DPCI) revealed that the A-G has referred 21 material irregularities to it for investigation since over the past five years.

This happened as the Special Investigating Unit (SIU) disclosed that the A-G made 19 referrals to date.

The A-G has the power to refer material irregularities picked up during auditing of finances organs of state where fraud is involved, there is criminality or complex investigation needs to be done to the DPCI.

It also refers to the Special Investigating Unit when non-compliance with laws is identified and there is an opportunity to recover funds as a result of enrichment or financial loss to the State.

During the briefing of the Standing Committee on A-G, MPs heard that out of the 738 material irregularities the Office of the A-G has referred 99 cases to the law enforcement agencies for investigation and recovery of funds.

Major-General Meli Makinyane said 15 of the cases valued at R429 million were under investigation, one valued at R19.7m has been sent to the National Prosecuting Authority for prosecution.

Makinyane said five cases, which are valued at R3.8m, are cases that are before courts.

“There is one matter which is pending in court where there was seizure of R251 770 that was found in possession of the suspects,” he said.

The referrals were from the South African Post Office and Postbank, Matjhabeng Municipality, Free State Development Corporation, Department of Human Settlements, Department of Education, Department of Defence, Mohokare Municipality and Madibeng Municipality.

“Out of the cases that are under investigation, a total 278 statements have already been obtained and filed,” Makinyane said.

He told the MPs that the referrals were made between November 2021 and April 2025.

Makinyane said one of the cases referred to DPCI involved the arrest of 11 people who were arrested in possession of stolen South African Social Security Agency’s (Sassa) cards.

There was also the arrest of a former manager and an official who misrepresented on the Sassa manual payment list that they paid legitimate beneficiaries when it was not the case.

Makinyane told the MPs one of the material irregularities related to the unauthorised debit orders debited against the Madibeng Municipality’s bank account.

“The Madibeng Municipality implemented monthly bank reconciliations to detect these debit orders and to request that the relevant banks reverse these debit orders. The matter was submitted to the Director of Public Prosecution on 3 July 2025 for the allocation of a prosecutor.”

Makinyane said they were investigating failure by Postbank to maintain an effective system of internal control on the card management and Sassa beneficiary payment process.

“Sassa cards to the value of R13 579 174.60 were written off due to the South African Reserve bank directive,” he said in reference to one the two cases probed at Postbank.

Makinyane added that another material irregularity related to payment made by the Free State Department of Human Settlements to several service providers when a contract was extended due to Covid-19 and strikes.

Meanwhile, SIU head Andy Mothibi said there have been 19 material irregularities referred to the corruption-busting unit by the A-G to date.

“Three were investigated under the existing proclamations and nine have been translated into proclamations for investigations,” Mothibi said.

He also said there were seven applications that were pending in the Department of Justice and Constitutional Development for a sign off by President Cyril Ramaphosa.

“Four investigations have been finalized.”

Mothibi said material irregularities referred to the SIU included the National Treasury, Umgeni Water, Chris Hani District, Free State Office of the Premier, Amajuba District Municipality, JB Marks Municipality, Ngaka Modiri Molema District Municipality, Department of Defence, Bushbuckridge Municipality and State Information Technology Agency.

He said SIU has submitted motivations for proclamations to probe material irregularities in Department of Military Veterans, Department of Roads and Public Works in the Northern Cape, Free State Education Department, uMzinyanthi District Municipality and Siyathemba Municipality.

mayibongwe.maqhina@inl.co.za