Cape Town - The poor financial management of Statistics SA in the past two years came under scrutiny in Parliament yesterday when it emerged the issues, which had resulted in the auditor-general issuing a disclaimer of the 2001-02 financial statements, had not been addressed a year later.

A disclaimer of financial statements means that the financial deficiencies were so grave that Auditor-General Shauket Fakie was not in a position to issue an audit opinion on them.

Stats SA compiles a host of critical economic data such as the monthly CPIX (consumer inflation less mortgages) figures and anything that affects its optimum functioning negatively, has ripple effects throughout the economy.

Attempts by statistician-general Pali Lehohla to explain away the malaise by pointing to the strain Census 2001 had placed on the organisation were dismissed by the chairman of the standing committee of public accounts, Francois Beukman, as unacceptable.

Resorting to such an excuse would merely confirm the financial management of the institution was not up to scratch, he said.

Lehohla and members of his executive team were grilled by the committee about the shortfalls in the financial management system.

Fakie said that even by the time his office was completing the 200203 audit, it was not possible to obtain a verification of an amount of R249m paid to 12 4000 temporary staff employed the previous year during the census.

Final payments made to most permanent employees who left could not be verified nor could the salary scales of newly appointed staff members.

Lehohla said that although reconciliations could not be done at the time the auditor-general's office was conducting its investigation, these had been finalised and were now available.

"We were not ready," he said, calling for a reaudit.

Lehohla said he had decided that the limited computer resources should be used for the census rather than the audit.

The organisation also suffered from a lack of financial expertise after a person who had been hired as a chartered accountant, turned out to be a "crook" with no qualifications.

Beukman was concerned about the lack of a performance management contract with the chief financial officer, who had been appointed in 2001.

Lehohla said this and other performance contracts would be finalised shortly. He said Stats SA had had a spate of resignation of senior executives last year, including the human resources director.

Census 2001 cost R122m more than the approved R776m resulting in unauthorised expenditure.

With acknowledgements to Linda Ensor and the Business Day.