The Auditor-General of South Africa (AGSA) has forwarded certain aspects of the alleged damage amounting to 5.27 million rand, related to lost or stolen assets from the Construction Works Programme (CWP), to the Special Investigating Unit (SIU).
AGSA found that the Department of Joint Management failed to provide documentation explaining the write-off of these assets, nor did it confirm whether criminal cases were initiated or if losses from executing agents managing these assets were recovered. This finding is detailed in the department's annual report for 2024/25, which describes the status of a significant irregularity previously noted by the Auditor-General.
Auditor-General's Findings
According to the report, the department contracted executing agents to acquire assets intended for use on CWP sites. During an internal investigation, assets were identified that were lost or stolen. These assets were written off during the 2023/24 financial year.
However, the department could not present evidence of the circumstances leading to the write-off, nor confirm that cases were registered with the South African Police Service. Furthermore, it failed to demonstrate the existence of effective financial control, risk management, and internal control systems to protect the assets.
Auditor-General Tsakani Maluleke stated: 'The lack of adequate control in the protection and disposal of assets led to non-compliance with section 38(1)(d) of the Public Finance Management Act and a probable material financial loss of R5,269,528.62.'
Department Given New Deadlines to Rectify Irregularities
Maluleke notified the CEO Mubelello Tshangane about the material irregularity in January 2025 and requested written explanations regarding the measures taken and planned to address this irregularity. Tshangane responded in February and again in March 2025. After assessing the responses, Maluleke concluded that proper action was not being taken.
In July 2025, she recommended that the department investigate the causes and circumstances leading to the non-compliance, implement corrective measures, and address control weaknesses. This recommendation was due by February 24, 2026, with a progress report due by October 31, 2025. Despite Tshangane submitting a progress report in November 2025 and additional documentation in February 2026, Maluleke found deficiencies in the responses.
She noted: 'Although the accountant conducted an investigation into this matter, satisfactory progress was not achieved in the quantitative assessment of financial losses, the taking of disciplinary action against responsible officials, and the implementation of effective internal controls to prevent further loss of CWP assets.'
Maluleke has now ordered the department to develop and begin implementing an action plan to improve the protection and management of CWP assets by February 2027. A progress report must be submitted in October 2026. She also instructed the department to immediately initiate appropriate disciplinary action against officials found responsible as a result of the investigation.
Assessment of Referral to SIU Continues
Maluleke reported that she decided to refer certain aspects of the material irregularity to the SIU in accordance with section 5(1A) of the Auditor-General Act, combined with relevant provisions on material irregularities. This decision was made after confirmation from the SIU that the auditor had sent the department's asset-related investigation findings for assessment according to the jurisdictional requirements of the SIU Act.
Maluleke stated that the referral process to the SIU is underway. The article should not assert that the SIU has officially accepted the investigation unless confirmed by the body itself. Minister of Joint Management Velenkosini Hlabisa acknowledged the Auditor-General's report, as well as the processes of action and referral to the SIU. He emphasized that 'these issues require continuous implementation of corrective measures, timely investigations, consequence management, improvement of asset protection, and strengthening of oversight by management.'
The department's Audit Committee urged management to prioritize the material irregularity and address the root causes of control failures. It noted that this would strengthen governance, improve internal control, and support the department's goal of achieving a clean audit opinion—an unimpeachable opinion without material qualifications.
