Financial chaos continues to haunt the public works department and the entity responsible for managing its property portfolio.

According to the department's 2012/13 annual report, tabled in Parliament, Auditor General (AG) Terence Nombembe again struggled to find proof of much of the department's expenditure, which runs into billions of rand.

The department itself received a qualified opinion, while the Property Management Trading Entity (PMTE) received its third consecutive disclaimer -- one of the worst audit opinions possible.

Nombembe found the department did not always follow the law when it procured goods and services and in managing its contracts.

"Sufficient appropriate audit evidence could not be obtained that all contracts and quotations were awarded in accordance with the legislative requirements as the department did not implement proper record keeping..." Nombembe said in the report.

Inaction against corrupt officials and co-conspirators was highlighted.

"Appropriate action was not in all instances taken against officials and role players... where investigations proved fraud, corruption, improper conduct and failure to comply with the supply chain management system..." the AG said.

With regard to the PMTE, Nombembe could not make findings as leases and many other documents could not be found.

The AG found instances of a conflict of interest and the irregular acquisition of goods and services.

The Democratic Alliance said the department was dysfunctional and needed to be placed under administration.

"The dysfunction of the department of public works and its PMTE affects the service delivery of all government departments and organs of the state that rely on the department to manage their property needs," DA MP Anchen Dreyer said.

She cited a recent case in Newcastle where police were evicted from their offices because the department had not paid the rent.

Dreyer would write to Finance Minister Pravin Gordhan to ask him to intervene.

"It is clear that [Public Works] Minister Thulas Nxesi has failed to rehabilitate the ailing PMTE. The time has therefore come for National Treasury to place the department of public works' PMTE under administration."