Billions of rands in unauthorised and irregular spending have been identified in Gauteng, auditor general Terence Nombembe said on Thursday.
”Unauthorised, wasteful and irregular spending cost the province billions of rands,” Nombembe told a press briefing in Johannesburg on Thursday.
The provincial health department accounted for R1-billion of the wasteful expenditure, his spokesperson Africa Boso said.
Audit findings for the 2008/2009 financial year found unauthorised spending of over R1-billion, irregular spending of R1,9-million, and ”fruitless and wasteful” spending of R2,2-million.
An underspending on the HIV/Aids conditional grant of R68-million was also reported.
The health department received a disclaimer of opinion.
Nombembe gave a thumbs down to four provincial departments and 11 public entities for their 2008/2009 financial statements.
Education, housing and economic development got qualified audits on their capital asset. Education and health were also given qualified audit opinions on their expenditure, said Nombembe.
These departments did not have a clear trail of supporting documents to support figures in their financial statements.
The departments of social development, agriculture, community safety, local government, transport and sport received financially unqualified opinions. The office of the premier, provincial treasury, provincial legislature and Gauteng Shared Services Centre were also unqualified.
”The unqualified departments form 72%%, 21% are qualified while 7% are disclaimers,” said Nombembe.
He said there had been an improvement in the audit opinions of provincial departments. ”This is largely due to the improvement of the process of the Gauteng Shared Services Centre in serving departments,” he said.
However, he pointed out that it was disappointing that housing, health and economic development regressed to worse audit opinions this year.
Economic development fell from an unqualified to a qualified opinion due to management not having implemented a sound accounting system to achieve reliable financial reporting. Health regressed from a qualified opinion to a disclaimer because of its high dependency on consultants, the services of which were subsequently terminated.
Housing also fell to a qualified opinion from financially unqualified. This was due to the inability of the accounting division to ensure compliance with accounting standards relating to assets.
”Regressions in departments are generally due to inadequate leadership involvement, lack of adequate action plan and lack of financial capacity and skill in finance sections,” he said.
Education remained as a qualification because leadership failed to effectively implement the action plan to address recurring audit findings, lack of effective documentation management and inadequate supervision and capacity in the finance unit.
”There is a need for these departments to prepare action plans with milestones to address the audit findings and the executive should monitor and follow up on the progress.
”The leadership must ensure that effective document management processes are in place and suitably skilled finance staff are employed,” Nombembe said.
Public entities that had their finances in order were the Gauteng Tourism Authority, Gauteng Gambling Board, Gauteng Film Commission and Gauteng Economic Development Company.
Among those who received a disclaimer were Blue IQ Investment Holdings, Greater Newtown Development Company and Constitutional Hill Development Company.
The auditor general identified ”human resources warning” signs during the audits. Five departments did not have formal human resource plans approved by the executives. Seven did not perform background checks for new appointments and six departments had employees with negative capped leave.
Nombembe’s office also experienced difficulties in getting information for its audit.
”Finance officers should work closely with their relative executives to ensure that access control to information is effective and that the information is available on time for audits,” said Nombembe. – Sapa