An investigation by the auditor general investigation has found that out of R10.5-billion of unnecessary spending, the department could neither provide a cause nor hold anyone accountable for the R1.5-billion. (Photo by RAJESH JANTILAL/AFP via Getty Images)
The auditor general’s investigation into the finances of the department of defence and military veterans showed that R1.5-billion was unaccounted for.
It found that out of R10.5-billion of unnecessary spending, the department could neither provide a cause nor hold anyone accountable for the R1.5-billion, according to MP Cyril Xaba.
“In 88 cases of fruitless expenditure: 24 are in progress, 54 not started, and 10 had been finalised. AGSA [the Auditor-General of South Africa] notes that when cases were finalised, the department fails to take disciplinary steps and account for losses,” Xaba said during an appearance by the department before parliament’s portfolio committee for military veterans.
The department had supplied a figure of R428-million in unaccounted for spending in 2021, but this did not align with the auditor general’s billion rand figure, said Eric Siphiwe Sokhela, the department’s chief financial officer.
The discrepancies in spending are not exclusive to untraced expenditure. In April 2020, the department procured 1 000 thermometers for R3 000 each, totalling R3-million, but the price was above the R2 727.86 tissued at the treasury, as cited by auditor general. This means that R200 000, too, is unaccounted for.
Lack of accountability, unusual contract management and poor financial management at the department were at the forefront of the auditor general’s findings.
Xaba said that in March, the auditor general requested information from the department about contracts relating to the State of the Nation address (Sona) by President Cyril Ramaphosa and the status of records of all entities reporting to the defence department. The auditor general even wrote a letter to Defence Minister Thandi Modise to bring attention to the requests.
“The department failed to supply the auditor general with the required information on operations and contracts with Sona. When highlighting this concern, the DOD [department of defence] again failed to respond. As a result, the findings into these contracts were limited to the scope of the information provided,” he said.
In addition to failing to provide information, Modise did not provide responses to the two reports on the Sona contracts and the review of state records, Xaba added.
The Sona contract in question involved an unfair award for fuel, according to the auditor general’s findings. The contract stipulated that fuel meant for fighter jets was to be transported by rail, but it was instead conveyed by road. The department disagreed with the findings, prompting the auditor general to elevate the contract breach to the Directorate for Priority Crime Investigations (the Hawks).
Amid all this, the department highlighted what it called a discrepancy in the budget allocated to it by the treasury and said a much higher amount of money was required to run defence operations.
“The full-cost funding requirement of the DOD for 2022-2023 amounts to an estimated R75-billion as opposed to a national treasury allocation of R49-billion,” the department said.
Even in those budget areas where the department could account for overspending and short-falls, plans to prioritise and redirect funding had not addressed any of the pressing problems it faced, according to MP Sarel Marais.
“These action plans do not address the problems. We are and have been in this dire situation. It’s a process to learn from AG’s findings and not repeat problems,” Marais said. “This means nobody is learning from that. Expenses are irregular and continue over and over.”
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