Cape Town - Auditor-general Shauket Fakie yesterday fingered the departments of defence, trade and industry, and public works as being the worst financial managers in government in 2003/04.

In his annual general report, he said of the R142.1 million in unauthorised expenditure detected during the year, defence (R40.5 million), trade and industry (R32.2 million) and public works (R30.4 million) were the main culprits.

He had found that 12 departments had been guilty of irregular expenditure totalling R30.2 million, that five had recorded unauthorised expenditure totalling R111.5 million and that five more had been involved in fruitless and wasteful expenditure of R400 000.

Although all these cases represented only 0.1 percent of total government expenditure during the year, they clearly influenced Fakie's decidedly mixed opinion on government's financial management and accountability during the year.

In his general, activity and special reports tabled in parliament, Fakie expressed particular concern about the poor quality of asset management and control over information systems, the high level of vacancies among top managers in departments, the tardiness of many parastatals and other public entities in submitting their financial statements for scrutiny and the "seemingly exorbitant" salaries paid to top officials at parastatals.

Fakie presented his reports to the standing committee on public accounts at a special workshop in Saldanha yesterday, where specific reference to the recent furore about him having "doctored" his report on the controversial arms deal was avoided.

He has denied the charge and parliament still has to make a decision on how to deal with the issue.

His reports contain a wealth of detail about the state of national accounts in 2003/04, the difficulty some departments and parastatals are having in meeting the exacting requirements of the Public Finance Management Act (PFMA) and the fact that the vacancy rate among senior civil servants now stands at more than 20 percent.

Home affairs, public works, and water affairs and forestry departments achieved the dubious distinction of getting qualified audit opinions from Fakie for four years running.

The department of transport was singled out for the poor quality of information provided.

But Fakie also fingered the treasury for not providing departments with enough guidance on how to meet PFMA requirements.

He said his office had conducted a pilot investigation into the non-disclosure of financial interest by civil servants and had found that 22 senior and about 2 800 other officials had not declared their interests in firms doing business with their departments.

Although he did not want to list all the cases he had uncovered, he cited the Ikangala Water Board, which had received a transfer payment of R2 million from the treasury.

Its only other income had been R63 000 but total directors' remuneration for the year had been R2.7 million.

This had resulted in a net loss for the year totalling R1.3 million and went totally against the PFMA's aim to "maximise delivery through the efficient and effective use of limited resources", Fakie said.

With acknowledgements to Lynda Loxton and the Business Report.