Auditor-General Kimi Makwetu has called on the provincial leaders and legislatures to pay attention to improving the audit outcomes in their provinces.
On Wednesday, Makwetu released his report on the 2018 to 2019 audit outcomes for national and provincial government.
Makwetu said the Western Cape continued to produce the best results with 79% clean audits and the lowest irregular expenditure, and fruitless and wasteful expenditure.
At 74%, the province also had the highest number of auditees with good financial health status and there were no auditees with unauthorised expenditure.
Makwetu said over the five years, there had been "a solid and consistent pattern of good audit outcomes" in the province. He added this could be attributed to the provincial leadership and accounting officers and authorities "instilling a culture of accountability and good governance".
He said the province also showed a good financial health status.
"A well-controlled environment hardly ever has financial health risks."
Overall, the outcomes in KwaZulu-Natal remained unchanged with three auditees improving and three regressing - there are now five clean audits as opposed to three in the previous year.
Makwetu said there were recurring trends visible in the province and that "greater effort is required to trigger stronger outcomes".
At R12.4 bn, the irregular expenditure of the province is the highest of all the provinces and it is more than that of the national government.
Its closing balance of R41.9 bn is also the highest of all the provinces - this despite the Auditor-General of South Africa's (AGSA) ongoing recommendations to leadership to take steps to avoid the abuse of supply chain management legislation.
The Eastern Cape's audit results have progressed since 2014/2015, but greater effort is required for sustainability. The province's audit outcomes regressed slightly in 2018/2019.
Makwetu said this was due to "the slow pace of addressing the root causes of the findings we raise every year in spite of commitments from accounting officers and authorities".
He added the culture of non-compliance - especially in the area of supply chain management - continued as a result of leadership's tolerance for deviations from legislative requirements.
"We again raised our concerns about the financial health of the auditees in the province - especially the commitments by and claims against departments - which could potentially have a negative impact on provincial funding," Makwetu said.
Makwetu said the improvement in Limpopo's audit outcomes - three auditees improved and one regressed - was an encouraging trend, "but more work needs to be done before we can say that the improvement is sustainable".
He added to facilitate sustainable change, the lack of discipline in controls needed to be addressed and a decisive commitment should be made to effect consequences.
The province's irregular expenditure increased to just over R2bn as a result of widespread non-compliance with supply chain management legislation "fed by a blatant disregard for legislation and officials not being held accountable for these transgressions".
Mpumalanga's audit outcomes regressed after an improvement in the previous year.
The AGSA's report revealed that the province's results have been erratic over the past five years - with auditees not sustaining their outcomes. This was largely due to a failure to institutionalise strong internal controls, which had, in turn, resulted in unstable internal control environments.
Makwetu said Mpumalanga's audit outcomes should be observed closely to see whether the leadership could effectively address the warning signals the AGSA reported.
Makwetu said his office had noticed a concerning trend emerging from the audit outcomes in Gauteng. After years of obtaining 100% unqualified audit opinions, two of the province's auditees obtained disclaimed opinions. The clean audits have decreased from 12 to seven.
Irregular expenditure increased and the AGSA again reported deficiencies in the management and delivery of key projects in the province.
"Accounting officers and authorities did not respond timeously to the findings we raised in prior years, especially on the need to strengthen the supply chain management processes and reporting on performance," he said.
"We were encouraged by the tone set by the premier upon engagement with the outcomes. Firm steps are already being taken to give attention to the matters raised in the audit."
As in the previous year, the Northern Cape made no major strides to improve its audit outcomes. The audit results regressed - registering two regressions and no improvements - as was the case in the previous year.
The AGSA found the province's leadership remained slow to address its continued calls for improved controls and consequences for transgressions and poor performance.
Makwetu said the provincial leadership made numerous commitments in the past but the impact was minimal, as little was done to implement and monitor these.
While the audit outcomes improved overall in the Free State - five improvements and three regressions - and there was "a notable effort towards reducing disclaimed and adverse opinions, the overall accountability in the Free State is still a concern", said Makwetu.
It was the only province with no clean audit and its financial health was in a bad state with 69% of the auditees requiring urgent intervention, he added. It also had the highest unauthorized, and fruitless and wasteful expenditure of all the provinces.
"A culture of no consequences prevails, and the political leadership is involved in the decision-making at some auditees. The continued disregard for procurement processes resulted in irregular expenditure at all auditees and created an environment vulnerable to the abuse of state funds," Makwetu said.
"Our audits revealed poor planning, management and monitoring of infrastructure and other projects. The completion of these projects was often delayed, resulting in the quality of work being compromised and project costs being exceeded. This had a negative impact on the delivery of services, as funds were not always used effectively and efficiently to provide sustainable services."
Makwetu said North West Premier Job Mokgoro had led by example in setting the tone for accountability in the province and this had been embraced by members of the executive council.
It resulted in a stagnation of the overall poor audit outcomes for the first time in four years. This was an indication of a turnaround, which required greater effort and focus from the new political leadership to shift the audit outcomes.
Following the intervention by the inter-ministerial task team to place five departments under administration during July 2018, certain improvements in the control environment of departments were noted, and these should be sustained and replicated in the province.
Makwetu found this to be an encouraging trend, but the effort was not substantive enough to have an impact on the overall audit outcomes of the province.
The irregular expenditure remained high at R3.2bn and the closing balance was one of the highest of the provinces at R18.8bn.
"We urge the new political leadership together with the inter-ministerial task team to continue setting the right tone for accountability and consequences, including efforts to fully restore governance in the province," Makwetu said.