Defence dept in hot water

Auditor-General Shauket Fakie has warned the department of defence (DOD) it faces a qualified audit if it fails to account properly for a R3,57-million donation from the Netherlands used to cover expenses during the 2001 Mozambique floods.

Parliament’s watchdog public accounts committee on Wednesday questioned senior DOD officials, including defence secretary January Masilela, about several issues, including foreign aid received.

There was no supporting documentation for audit purposes relating to the spending of the R3,57-million donation, ANC MP Pierre-Jeanne Gerber said.

“The donors expect the department to appropriately account for these donations and the lack of accountability could jeopardise future assistance,” he said.

In his reply, the department’s chief financial officer Jack Grundling drew a distinction between donations in cash and in kind. There was no policy or system in place for donations in kind such as offers of training and equipment.

It was hoped one would be in place by the end of June, Grundling said. As far as cash donations were concerned, up until the 2001 Mozambique floods the department had never had any of its activities funded by donors, Grundling said.

“When the floods occurred, and there was a scramble to help these people, the airforce were the first off the mark, the army tried to get involved, and the medical services jumped into the helicopters with their medical bags.

“They all went off.
There was no plan at that time. It took us a very long time to find out eventually what had happened. We have to, the best of our ability, tried to reconstruct what took place, and prepare to work further with the auditor-general in this regard.”

Grundling said none of the funds had come directly to the department, but had been deposited in the Reconstruction and Development Programme Fund, and this could be accounted for. The department had learnt its lesson from the Mozambican

operation and now had a proper system in place relating to cash donations, as borne out by the SANDF’s Burundi deployment, which had been funded by donors.

In his reaction, Fakie told the committee that as external auditors his office would have difficulty as the donors had laid certain conditions on which the grant was given. “We will have to see whether conditions were complied with. We would definitely give a qualified audit based on the current circumstance and the way expenditure is to be verified.”

Shauket suggested the department should go back to the donor and explain its difficulties and ask for the conditions to be relaxed.

This would then make it easier for the auditor-general’s office, who could then base its audit on the relaxed conditions. - Sapa

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