Government leadership continued to turn a blind eye to poor financial reporting standards in departments, the Auditor General Terence Nombembe said on Tuesday.

Briefing the media in Cape Town, Nombembe said a number of departments had failed to implement the AG's recommendations on financial management.

"Although there has been a trend of improvements in terms of audit opinions, there is still much room for auditees to move away from qualifications," he said.

"Most departments that are still qualified did not have adequate action plans for issues raised in the previous audit reports," he added.

Out of the 463 departments and parastatals audited in the 2007/08, 105 received qualified reports.

This was a slight improvement from the 2006/07 financial year when 129 departments and parastatals received qualified audit reports.

Nombembe attributed the high number of qualified reports to amongst other things, departments' failure to prepare regular financial statements.

"In order to deal with the high prevalence of material misstatements in financial statements that get corrected during the audit period, departments need to re-focus the role of Chief Financial Officers (CFO) towards preparation of regular management accounts.

"At the moment this is not the norm in government — the tendency is to prepare the full set of accounts at the end of the year," he said.

Sapa