Auditor general flags R25.7bn in irregular govt spending

The South African National Roads Agency was one of the biggest culprits with R1.6-billion in irregular expenditure. (Delwyn Verasamy, M&G)

The South African National Roads Agency was one of the biggest culprits with R1.6-billion in irregular expenditure. (Delwyn Verasamy, M&G)

Our national and provincial departments racked up R25.7-billion in irregular expenditure, although this was 27% less than the year before.

There has been irregular expenditure of R25.7-billion across the country’s national and provincial departments and public entities for the 2014-2015 year, auditor general Kimi Makwetu said on Wednesday.

If there is a silver lining to his office’s general report on national and provincial audit outcomes, it’s that irregular expenditure decreased by 27% from the previous year’s figure of R35.28-billion.

The report covers 468 auditees, which include 167 national and provincial departments and 301 public entities with a total budget of R1.1-trillion for the year under review.

Some of the biggest culprits were the Gauteng transport department with R1.9-billion, the Gauteng human settlements department with R1.9-billion, the Mpumalanga health department with R1.9-billion, the South African National Roads Agency with R1.6-billion and the Gauteng education department with R1.7-billion.

Procurement processes
Makwetu said one of the findings was that auditees do not follow competitive or fair procurement processes.

He said 31% of auditees had material findings on supply chain management. 

“This contributed largely to the irregular expenditure of R25.7-billion for this year. This expenditure does not necessarily mean that money was wasted or fraud committed in all instances,” Makwetu said.

“We normally highlight those areas in which deficiencies were observed, and we are required to report on them in order to bring them to the attention of the leadership of the institutions. R25.7-billion could be at risk if the necessary investigations are not undertaken.”

Decrease in fruitful expenditure
The report found that there was a decrease in fruitless and wasteful expenditure from R1.2-billion in 2013-2014 to R936-million.

For the current and previous years, 197 auditees incurred fruitless and wasteful expenditure, of which 151 incurred expenditure for the past three years.

Of the R936-million in fruitless and wasteful expenditure for 2014-2015, R32-million was incurred by preventing further such expenditure, or losses.

This normally relates to the cost of cancelling irregular contracts, or the contracts of non-performers.

Gauteng problems
Some of the main contributors to wasteful expenditure were Gauteng’s transport department with R251-million, the Gauteng health department with R160-million and the Eastern Cape health department with R74-million.

Unauthorised expenditure, which is where the expenditure by auditees was not incurred in accordance with an improved budget, decreased from R2.6-billionn in 2013-2014 to R1.6-billion in 2014-2015.

The main contributors to this figure include the Free State education department with R589-million, the national department of transport with R393-million and the North West health department with R263-million. – News24.com

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