When she completed high school, all Tsakani Maluleke wanted was to emulate her father, George Maluleke, a revered legal mind and judge. But at the University of Cape Town she discovered accounting and decided to change her career path. It was the early 1990s, at the beginning of the transition to democracy, and not many black people, especially women, were making it as chartered accountants.
“I decided to defy the odds, take up the challenge and the rest is history.” That history has included more than 20 years as a chartered accountant in the private and public sectors, specialising in development finance, corporate advisory, auditing and skills development. She has served on the Presidential BEE Advisory Council and as chair of the South African Institute of Chartered Accountants.
But it is her current role as the auditor-general (AG) that has given her the most satisfaction and confirmed the wisdom of her decision not to follow in her father’s footsteps. She has been with the office of the auditor-general (AGSA) for 11 years — serving as national leader for audit services, deputy auditor-general and CEO before being appointed AG in 2020.
Among her most recent milestones has been the appointment of AGSA as the external auditors for the UN Educational, Scientific and Cultural Organisation (Unesco) — a move that she says is in recognition of the organisation’s reputation for excellence.
This year marks the beginning of her fourth year in a seven-year term as AG. “My three years at the helm have been nothing less than challenging, yet also extremely fulfilling,” she tells the Sunday Times in AGSA’s Johannesburg offices.
We have world-class abilities ... I inherited a strong and credible institution and I have to build on that and leave it even better
— Auditor-general Tsakani Maluleke
“When I took over as AG, my first task was to present the second report on Covid-19 expenditure and since then I have, year on year, delivered special reports and general reports which enable South Africans to hold their public representatives accountable. Our work on activating the accountability ecosystem is vital.”
Maluleke grew up in Soshanguve, north of Pretoria, and was raised by a lawyer father and teacher mother. Her father passed away in 2017, having by then become a judge in the Johannesburg high court. Though both parents were professionals, they still had time to run a separate family business.
“My parents instilled the importance of education and family values in myself and my siblings at a very young age. My family owned a Spar supermarket in the township, where I worked during school holidays, and this is where I started learning about financial management. I always wanted to make a difference in people’s lives and therefore entering the public service was not difficult,” Maluleke said, explaining why she had chosen to go into the public sector when she could have made more money in the private sector.
Though AGSA’s primary duty is to look after the country’s financial books, it has also taken upon itself the role of helping to produce accounting skills. It is now among the top three organisations training people in the sector.
“We are now, over the 20 years, almost at 2,000 individuals that would have qualified through the scheme of AGSA. That’s 2,000 young people, majority black African women. These are individuals who often are the first graduates in their families. It does change the lived experience of generations of the families.”
The quality of graduates produced by the AGSA scheme has attracted overseas and private sector employers, she said.
Maluleke has already received international recognition in the three years she has been in office. In 2021, after studying 118 supreme audit institutions (SAIs), the World Bank declared that only AGSA and the Seychelles have “very high independence” from any form of undue interference. This was followed by last November's announcement by Unesco that it was appointing Maluleke’s office as its external auditor.
She believes the independence of her office and the quality of the work it produces earned it the contract to audit the UN agency. “It reminds us about the professionalism and the independence that sits in this office. It also shows that we have world-class abilities. It is a significant milestone because it’s building on the legacy of my predecessors. I inherited a strong and credible institution and I have to build on that and leave it even better.”
Maluleke also believes there is a need for improvement from accounting officers and authorities in the public sector in their response to her recommendations. Much more work needs to be done, especially in the recovery of billions of rand that are lost by the government and state-owned enterprises.
Huge financial losses, which include more than R7bn in fruitless and wasteful expenditure, are caused by overpayments or payments made to suppliers with no goods or services received. In some instances they are caused by unfair and uncompetitive procurement processes where the most cost-effective options are not chosen.
“One doesn’t expect perfection in all transactions, but there must be accountability. There must be willingness to have an ongoing process of improving our internal controls. Yes, you might get one tender wrong but there shouldn’t be a repeat. If these institutions are not being monitored on a regular basis, as the design of governance processes demands, then these problematic transactions will go on for years without any real accountability and by the time you try to catch the issue it’s quite late,” said Maluleke.
As the government and law enforcement agencies struggle to contain widespread malfeasance, Maluleke said her extended mandate after parliament amended the Public Audit Act in 2019 has enabled her office to deal effectively with material irregularities (MIs). These are the most serious findings in an audit outcome, including financial mismanagement, fraud, maladministration, theft and breaches of fiduciary duties that result in material loss or misuse of public resources.
Failure by accounting officers to deal with MIs allows Maluleke to refer them to relevant public bodies for further investigation, the issuing of binding remedial action or the issuing of a certificate of debt for failure to implement remedial action if there is a financial loss involved.
What we have seen is improved responsiveness. We find that those who run public institutions more readily respond to our MI than normal audit findings
“What we have seen is improved responsiveness. We find that those who run public institutions more readily respond to our MI than normal audit findings. Over time we have been able to see our own processes resulting in the protection of resources. We are now tracking over R2bn of resource protection that has come through the work of the AGSA. The loss is much greater than that, if you look at the difference between what has been lost, from the transactions we have picked up ... and what has been recovered there is quite a big gap”.
“What that tells you is that we as AGSA have used our powers for good and we continue to do so. But our mechanism cannot be the sole remedy — you’ve got to get the people who are running these institutions to do what they are supposed to do.”
Political instability
AGSA has found that political instability caused by coalition governments in municipalities has negatively affected service delivery, she said. Leadership instability in state-owned enterprises, such as the Passenger Rail Agency of South Africa (Prasa), has had a direct effect on services to the public. Since 2015, Prasa has been engulfed in allegations of corruption, which led to it having no permanent CEO for more than five years. It has lost billions and struggled to provide train services.
“If you look at Prasa, you can see the link between instability at the board, instability at management and the performance of that institution. But those are the ones people can see. The ones that people might not see readily are those where financial statements are not being submitted, so you get these audits that are not done, like the UIF (Unemployment Insurance Fund) and the compensation fund. The issue is that we are not seeing the direct impact today of inherent governance failures on those institutions. It’s the same in municipalities which don’t submit financials year on year, it is normally dysfunctional,” said Maluleke.
She used as an example the Free State municipality Maluti-a-Phofung, known for dysfunctionality, unaccountability and mismanagement over a number of years. The coalition-run council has been issued with a disclaimer audit opinion because it could not provide auditors with evidence for most transactions in its financial statements.
“For as long as the governance arrangements don’t create stability, especially in administration, you are not going to be able to build the capability within each public institution. We’ve got to worry about ensuring that every single one of these entities does what they are supposed to do, by driving stability, competence and accountability at administration level,” said Maluleke.
Her goal as AG is to see a more professional public service where managers are competent, with a functioning internal audit and accountable accounting officers.
She said her office was not only focusing on resource recovery through the MI process but fixing public institutions and reversing harm. They found a hospital in Mpumalanga that had bought equipment for its neonatal department but had not used it for six years because it had no staff. Through her intervention and engagement with the hospital, the neonatal ward is now functioning with a full staff complement.
“Our investment has not just been resource recovery, the MI processes have also resulted in fixing public institutions and reversing harm. Our team in Limpopo was telling me about how they indicated to a manager that they were likely to issue an MI where the manager was not managing the water waste treatment plant properly and [the manager] attended to it immediately.”
Maluleke said she has seen great political willingness and co-operation among those who lead public institutions to change their culture.
Despite her demanding role, the mother of two said she still found quality time to spend with her children and siblings.
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