The Auditor-General of South Africa (AGSA) has expressed concerns about consequence management, irregular expenditure, and weaknesses in information technology (IT) controls within the department of human settlements and its entities for the 2025/2026 financial year. According to AGSA senior audit manager Lee-Ann Alaart, the briefing to parliament's portfolio committee on human settlements highlighted a decline in irregular expenditure. The closing balance decreased from R709m in 2023/2024 and R582m in 2024/2025 to R414m in 2025/2026. Despite this decline, the AGSA flagged weaknesses in how some entities dealt with irregular expenditure and followed through on consequence management.
The AGSA identified material non-compliance with consequence management requirements at the Property Practitioners Regulatory Authority (PPRA), Community Schemes Ombud Service (CSOS), and National Housing Finance Corporation (NHFC). At the PPRA and CSOS, proper and complete records were not maintained as evidence to support investigations into irregular expenditure. Specifically, the NHFC had R212m in irregular expenditure, and the auditor-general was unable to obtain audit evidence that disciplinary steps had been taken against officials who permitted irregular expenditure.
Investigations into irregular expenditure were still under way at the PPRA and NHFC, while some irregular expenditure had not yet been investigated. Four entities accounted for R377m of the R383m in irregular expenditure that had not been dealt with, representing about 98% of the outstanding amount. The AGSA's findings indicate that some entities have not adequately addressed irregular expenditure, and consequence management remains a significant challenge.
The AGSA also raised concerns about the IT environment across the portfolio. The audit identified weaknesses in vulnerability governance and resource constraints that delayed the remediation of security weaknesses. There was also continued reliance on outdated and unsupported systems, ineffective IT governance, and inadequate disaster recovery capabilities. These IT weaknesses were attributed to insufficient prioritisation of corrective action, inadequate monitoring of core security controls, and resource constraints.
The presentation highlighted that some entities have not prioritised IT control improvements, leading to sustained underlying technology and security weaknesses. Of the IT controls assessed, two entities were rated as having good controls, while three were rated as concerning. The AGSA's findings emphasise the need for entities in the human settlements portfolio to strengthen their financial and IT controls.
The AGSA's briefing is part of parliament's assessment of the department and its entities' financial and non-financial performance for the 2025/2026 financial year. The findings place renewed focus on consequence management and the need for entities to act against officials responsible for irregular expenditure. The AGSA's report highlights the importance of addressing these weaknesses to ensure accountability and effective governance.
The AGSA's report will likely lead to increased scrutiny of the department of human settlements and its entities. The findings and recommendations will inform parliament's oversight and ensure that entities take corrective action to address the identified weaknesses. Ultimately, the goal is to improve governance, accountability, and the effective use of resources within the human settlements portfolio.
Key points
- The AGSA identified material non-compliance with consequence management requirements at the Property Practitioners Regulatory Authority (PPRA), Community Schemes Ombud Service (CSOS), and National Housing Finance Corporation (NHFC).
- The AGSA flagged weaknesses in how some entities dealt with irregular expenditure and followed through on consequence management.
- The audit identified weaknesses in vulnerability governance and resource constraints that delayed the remediation of security weaknesses in the IT environment across the portfolio.
