Public Audit Act, and the material irregularity clock that runs with it
Since the 2018 amendment the Auditor-General can refer material irregularities, issue binding remedial action and, where a loss is not recovered, issue a certificate of debt against the accounting officer personally. Dimeri tracks every notification, response deadline and remedial step so nothing lapses by oversight.
What the Public Audit Act changed
The Public Audit Act 25 of 2004 establishes the mandate and powers of the Auditor-General of South Africa. For most of its life it was a statute about how audits are conducted and reported. The Public Audit Amendment Act 5 of 2018, which took effect on 1 April 2019, changed its character by giving the Auditor-General enforcement powers that reach individuals.
The mechanism is the material irregularity. The Act defines it as non-compliance with or contravention of legislation, fraud, theft or a breach of a fiduciary duty, identified during an audit, that resulted in or is likely to result in a material financial loss, the misuse or loss of a material public resource, or substantial harm to a public sector institution or the general public. When the Auditor-General identifies one, the accounting officer or accounting authority is notified and given an opportunity to respond within a set period.
What follows is a sequence with real consequences. The Auditor-General may refer the matter to a public body for investigation, may make recommendations in the audit report, and if those recommendations are not implemented may take binding remedial action. Where remedial action to recover a loss is not implemented, the Auditor-General may issue a certificate of debt against the accounting officer in their personal capacity. The practical effect is that a material irregularity notification starts a clock, and the institution's response, or its silence, determines where the sequence ends.
The obligations Dimeri tracks
The Public Audit Act is less a checklist than a process with deadlines attached. Dimeri holds the process, the dates and the evidence of what was done.
Material irregularity identification
Understanding what qualifies, and identifying likely material irregularities before the Auditor-General does.
- Register of potential material irregularities
- Loss or harm assessment recorded against each
- Link to the control failure that caused it
- Early escalation to the accounting officer
Notification and response
Where the Auditor-General notifies the accounting officer or authority of a material irregularity, a written response is required within the period allowed.
- Notification logged with the date received
- Response deadline tracked with reminders
- Draft response assembled from existing evidence
- Submitted response retained with its acknowledgement
Recommendations in the audit report
Recommendations made by the Auditor-General in respect of a material irregularity, with a period within which they must be implemented.
- Each recommendation held as an action with an owner
- Implementation deadline tracked and escalated
- Evidence of implementation attached
- Status reported to the audit committee each cycle
Remedial action
Binding remedial action taken by the Auditor-General where recommendations are not implemented, including action directed at recovering a loss.
- Remedial directive recorded with its terms and deadline
- Steps taken documented as they happen
- Recovery progress tracked against the amount
- Reporting back to the Auditor-General evidenced
Certificate of debt exposure
Where remedial action to recover a loss is not implemented, the accounting officer may be issued with a certificate of debt in their personal capacity.
- Open loss exposure visible to the accounting officer
- Elapsed time against each unimplemented directive
- Personal exposure summarised for the accounting officer
- Board and executive authority kept informed
Prior year findings and repeat exposure
Ordinary audit findings that are not resolved are the usual route to a material irregularity in a later year.
- All audit findings carried forward until closed
- Repeat finding flag with the number of cycles
- Root cause analysis across findings
- Audit action plan owned at directorate level
How Dimeri covers Public Audit Act
The material irregularity process punishes slow response more than it punishes the original error. Dimeri is built to make the response fast and the evidence already assembled.
The clock is visible
Every notification, recommendation and remedial directive carries its deadline, its owner and its escalation path. The accounting officer sees days remaining rather than a folder of correspondence.
Evidence already gathered
Because controls are evidenced through the year, the response to a notification draws on records that already exist with their dates and authors instead of a reconstruction assembled under pressure.
Cause, not just consequence
Each material irregularity is linked to the control that failed and the risk it sat under. That is what makes the remediation credible and stops the same irregularity recurring in the next cycle.
Findings that close before they escalate
Most material irregularities begin as ordinary findings that were never closed. Dimeri carries findings forward automatically with owners and escalation, which is the cheapest point in the sequence to intervene.
Getting Public Audit Act coverage in place
- 1
Load the open position
Current material irregularity notifications, recommendations, remedial directives and unresolved prior year findings are loaded with their dates and their owners.
- 2
Connect findings to controls
Each finding is tied to the control and risk behind it, so remediation addresses the cause and the audit committee can see whether it is likely to hold.
- 3
Set escalation that reaches the top
Because the exposure is personal, escalation is configured to reach the accounting officer or accounting authority directly when a deadline is at risk rather than stopping at a manager.
- 4
Report the position every cycle
Material irregularity status becomes a standing item in the audit committee pack, generated from live data, showing what is open, what is close to a deadline and what has been closed with evidence.
Public Audit Act questions
What counts as a material irregularity?
The Act defines it as any non-compliance with or contravention of legislation, fraud, theft or a breach of a fiduciary duty identified during an audit performed under the Act that resulted in or is likely to result in a material financial loss, the misuse or loss of a material public resource, or substantial harm to a public sector institution or the general public. Whether a specific matter qualifies is a judgement for the Auditor-General, and your legal advisers should be involved early.
Can the Auditor-General really hold an accounting officer personally liable?
The 2018 amendment provides for a certificate of debt to be issued against an accounting officer or accounting authority in their personal capacity where remedial action to recover a loss is not implemented. It sits at the end of a sequence that starts with notification and moves through recommendations and remedial action, so there are several points at which it can be avoided by responding properly.
How does Dimeri help during a material irregularity process?
It holds the notification, the deadline, the draft and final response, the recommendations, the remedial directives and the evidence of what was done, all against the same matter. The accounting officer sees the open position and time remaining rather than an email thread, and the audit committee gets the same view.
Does this replace our relationship with the audit team?
No. It changes what you bring to it. Rather than assembling support after a request, the evidence for each control and each remediation step already exists with its date, which shortens the exchange considerably.
Is this a substitute for legal advice?
No. The material irregularity process carries personal consequences and should be handled with your legal advisers. This page describes how Dimeri structures the tracking and evidence around that process.
Put Public Audit Act on one register
Every requirement mapped to a control with a named owner, the evidence held against it, and one view of where you stand.