The Department of Defence's annual financial statements have been given an emphatic thumbs-down by the auditor-general, Shauket Fakie.

The A-G's report contains pages of qualifications and emphases of matter - both of which point to serious concerns about the state of the department's financial affairs.

A major concern was the lack of internal controls around losses and damages. Thanks to missing files, badly-maintained loss registers and unreported cases, the A-G could not "verify the accuracy" of R48.7 million in irregularities or losses.

Further criticisms about record-keeping and stock registers raised concerns that the department may be losing track of weapons and ammunition.

"Differences exist between the physical numbers of weapons and ammunition on hand and those reflected on the system," Fakie noted.

Earlier this year, the department came under fire for being unable to explain how weapons that were supposed to have been destroyed turned up on public display at the SA National Museum of Military History.

Four armoured vehicles were seized from the museum in January. At the time, Jane's Defence Weekly correspondent Helmoed-Römer Heitman said the debacle meant the military "had no idea that ... weapons in its arsenal were missing".

The A-G's report notes cases where there was "no control" over keys to a safe where weapons were stored, and where ammunition was kept.

Fakie also found that while there had been a probe into the irregular sale of military small arms ammunition, it was not clear whether action had been taken against those responsible.

He also raised concerns about the state of the department's buildings and houses, which were deteriorating rapidly.

"This can mainly be attributed to a lack of funds and ineffective controls over repairs and maintenance," Fakie's report stated.

With acknowledgements to Janine Stephen and the Cape Times.