South Africa’s Budget Speech earlier this year once again emphasised fiscal restraint, efficiency and the restoration of credibility. In this environment, boards and executives across the public and private sectors face pressure to reduce costs and demonstrate measurable returns.
Oversight functions are often among the first to be scrutinised. Yet week after week, headlines continue to expose procurement failures, governance breakdowns, weak consequence management and recurring financial misconduct.
From municipal audit concerns to irregular expenditure in state entities and ongoing procurement disputes, the pattern is increasingly familiar: risks are identified, but accountability and consequences often lag behind.
Against this backdrop, internal audit is still too frequently viewed as a compliance requirement or reporting line. When budgets tighten, it risks being treated as a cost centre rather than as part of the governance infrastructure that protects value.
That is a dangerous misconception.
Sectoral considerations
Periods of economic constraint and uncertainty increase risk. Many companies face cost-cutting, procurement challenges and the need to accelerate technology investments. In the public sector, these pressures lead to greater exposure to irregular expenditure, service delivery failures and erosion of public trust. In the private sector, these pressures increase the likelihood of control breakdowns, fraud, cyber incidents and reputational damage.
South Africa does not suffer from a shortage of governance frameworks. The country has detailed public finance legislation, audit committees, reporting requirements and corporate governance codes. Yet irregular expenditure persists, municipal audit outcomes remain concerning and control failures continue to surface across both public and private sectors.
When internal audit is marginalised or under-resourced, warning signals are often identified but not escalated with sufficient authority. Findings may be issued, but implementation stalls. Over time, small control weaknesses compound into material losses.
The question is not whether organisations can afford an internal audit in a constrained year. Rather, it is whether they can afford to weaken independent oversight when fiscal discipline is most needed.
Proving its value
This requires an honest conversation about the profession itself. Internal audit is not a legislated profession in many African jurisdictions. Its authority derives from governance frameworks and the boards' confidence in it. That means it must continuously demonstrate its value. If it is perceived as producing reports rather than influencing outcomes, it will struggle to defend its place at the table.
The profession has been shifting from a narrow assurance focus to a broader mandate to protect and add value. That shift is about showing relevance. Counting findings and issuing reports is not enough. Internal audit must show how its work improves control environments, strengthens risk management and supports better decision-making.
This is particularly important as organisations continue to invest in digital transformation and artificial intelligence (AI). Large-scale digital projects and AI initiatives are capital-intensive. In a constrained fiscal year, those investments will be scrutinised for return on value. Independent assurance over how these projects are governed, how data is protected and how decisions are monitored becomes central to safeguarding scarce capital.
Technology does not eliminate governance risk. It simply changes its appearance. Tools are only as effective as the oversight structures that surround them.
Growing skills
There is also a capacity consideration. Across Africa, and in South Africa in particular, the pipeline of skilled internal auditors remains a cause for concern. Many people still enter the profession by chance rather than through deliberate career planning. If oversight functions are to meet rising expectations, they require sustained investment in talent, training and technical capability, particularly in areas such as cyber security and data analytics.
As the country navigates another year of fiscal discipline, the conversation should extend beyond expenditure cuts. Fiscal credibility is not achieved only by reducing spending. It is achieved by preventing loss, waste and failure before they occur.
Weakening oversight capacity in pursuit of short-term savings risks undermines the very credibility the Budget seeks to restore. In a constrained economy, governance is a safeguard against avoidable failure.
About Arlene-Lynn Volmink – CEO of the Institute of Internal Auditors South Africa
Volmink is a dynamic leader with over 23 years of experience in internal audit, risk management, governance and IT. Currently serving as the Chief Executive Officer of the IIA South Africa, she is committed to proactive assurance to drive strategic business objectives responsibly.
Volmink holds the Certified Internal Auditor global certification and an MBA from the University of Stellenbosch Business School, demonstrating her dedication to continuous learning. She has served on the board of ISACA South Africa Chapter and received international recognition with the ISACA Chapter Leader Award for her contributions to the tech community. Volmink is passionate about empowering women, and engages in initiatives locally and globally, advocating for education and gender equality.
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