English: This study has been undertaken against the background of public concern regarding the administration and financial management of public finances. Specific attention has been given to the 12 provincial departments in the Free State province. The purpose of this study was to determine whether or not there are trends in the aspects which have led to qualification, disclaimer and emphasis of matter paragraphs in the audit reports of these departments. This study aims to contribute towards the debate on the causes of the financial decline of government financial management and to offer some solutions to these problematic aspects. The literature review in this study focused mainly on the historic development of auditing. This historical overview covered areas in both the public and the private audit sectors and included the following aspects: 1) the development of auditing itself in England, the United States of America and South Africa; 2) the development of the audit report; 3) the development of the audit expectation gap; 4) the development of different forms of business as a key link in developments regarding the need for audits; 5) international harmonisation; and 6) the development of corporate governance as an integral part of auditing. The literature review was followed by a detailed analysis of the audit reports of the 12 provincial departments in the Free State. The aspects mentioned in each of the audit reports, from 2000/2001 to 2009/2010, were summarised and analysed to identify possible aspects that occurred, in each department separately, more than once over this 10-year period. A further comparison was made between the different departments to identify provincial trends. A basic scorecard system was also developed to rate and compare the various departments on their performance as far as audit reports are concerned. Based on the results of the comparison of audit aspects, a questionnaire was developed and distributed to the Members of the Executive Council (MECs), the Chief Financial Officers (CFOs), senior officials, the Auditor-General and private audit firms who also perform audits of public departments. The results of the empirical study, the questionnaire and the interviews indicated that the aspects identified in the document analysis of the audit reports correspond with the views of the interviewees. Aspects such as non-compliance to laws and regulations, insufficient supporting documentation, irregular, fruitless, wasteful and unauthorised expenditure and poor asset management were identified as the main causes of qualified and disclaimer audit reports. The same aspects have also proven to be challenges that the provincial departments need to address within the next three years. In addition to this conclusion, basic recommendations are made for improvement of these aspects in future. This study contributes towards the national debate on the causes for concern in public finance management and possible improvement to the public service in South Africa. This study further contributes towards possibly similar situations in the remaining eight provinces in South Africa in that the provinces may benefit from the aspects identified and the recommendations made to improve their own financial management.
Afrikaans: Hierdie studie is onderneem teen die agtergrond van die openbare kommer oor die administrasie en finansiële bestuur van openbare finansies. Daar is spesifiek aandag gegee aan die 12 provinsiale departemente in die Vrystaatprovinsie. Die doel van hierdie studie was om te bepaal of daar tendense is in die aspekte wat gelei het tot kwalifiserings, weerhoudings en die paragrawe ter beklemtoning van seker aangeleenthede binne die ouditeursverslae van hierdie departemente. Hierdie studie beoog om 'n bydrae te lewer tot die debat oor die oorsake van die finansiële agteruitgang van die finansiële bestuur van die regering en bied 'n paar oplossings vir hierdie problematiese aspekte. Die literatuuroorsig in hierdie studie fokus hoofsaaklik op die geskiedkundige ontwikkeling van ouditering. Hierdie geskiedkundige oorsig dek areas in die openbare sowel as die privaat ouditsektore en sluit die volgende aspekte in: 1) die ontwikkeling van ouditering as sulks in Engeland, die Verenigde State van Amerika en Suid-Afrika, 2) die ontwikkeling van die ouditeursverslag, 3) die ontwikkeling van die ouditverwagtingsgaping, 4) die ontwikkeling van sakevorms as 'n sleutelskakel met betrekking tot die ontwikkeling van die behoefte aan oudits, 5) internasionale harmonisering en 6) die ontwikkeling van korporatiewe beheer as 'n integrale deel van ouditering. Die literatuuroorsig is gevolg deur 'n gedetailleerde analise van die ouditeursverslae van die 12 provinsiale departemente in die Vrystaat. Die aspekte genoem in elk van die ouditeursverslae vanaf 2000/2001 tot 2009/2010, is opgesom en geanaliseer om moontlike aspekte te identifiseer wat meer as een keer, in elke departement afsonderlik, oor hierdie tienjaarperiode plaasgevind het. 'n Verdere vergelyking is getref tussen die verskillende departemente om die provinsiale tendense te identifiseer. 'n Basiese telkaartstelsel is ook ontwikkel om die verskillende departemente te gradeer en te vergelyk wat betref hul prestasie met betrekking tot ouditeursverslae. Gegrond op die resultate van die vergelyking van die ouditaspekte is 'n vraelys ontwikkel en onder die lede van die Uitvoerende Raad (LUR’e), die hoof- finansiële beamptes (HFB’s), senior beamptes, die ouditeur-generaal en private ouditfirmas, wat ook oudits van openbare departemente uitvoer, versprei. Die resultate van die empiriese studie, die vraelys en die onderhoude, het aangedui dat die aspekte geïdentifiseer in die dokumentanalise van die ouditeursverslae, ooreenstem met die beskouings van diegene met wie die onderhoude gevoer is. Aspekte soos nie-voldoening aan wette en regulasies, onvoldoende ondersteuningsdokumentasie, onreëlmatige, vrugtelose, verkwistende en ongemagtigde uitgawes en swak batebestuur is geïdentifiseer as die hoofoorsake van gekwalifiseerde en weerhuodingsouditeursverslae. Dieselfde aspekte blyk ook uitdagings te wees wat die provinsiale departemente binne die volgende drie jaar behoort aan te spreek. Benewens hierdie gevolgtrekking, is basiese aanbevelings gemaak vir die verbetering van hierdie aspekte in die toekoms. Hierdie studie dra by tot die nasionale debat oor die oorsake van kommer in openbare finansiële bestuur en moontlike verbetering met betrekking tot die openbare diens in Suid-Afrika. Hierdie studie is ook van waarde vir die oorblywende agt provinsies in Suid-Afrika deurdat hierdie provinsies kan voordeel trek uit die aspekte wat geïdentifiseer en die aanbeveling wat gemaak is om hul eie finansiële bestuur te verbeter.
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