Public works misspent R35bn in irregular expenditure

The public works department has lost almost R35-billion to wrongful and wasteful construction or leasing of state buildings in the past five years, The Star reported on Monday.

The R34.98-billion losses were uncovered during the department’s review of around 1.3-million transactions of the Property Management Trading Entity (PMTE) dating back to 2009. The losses were revealed in a confidential report that The Star reported it had seen. The losses were … “a result of supply-chain management processes not adhered to”. 

It revealed however, that there was a steady decrease in the losses of public funds in the past five years. Around R22-billion was lost in the 2009/10 financial year, R4.9-billion was lost in 2010/11 while R3.8-billion was lost in the 2011/12 period. The figure was R3.1-billion in 2012/13 and R600-million in the last year. Around R1.1-billion was lost to fraudulent activities.

Minister shocked
Public Works Minister Thulas Nxesi said: “The public works turnaround has uncovered R34.9-billion irregular expenditure, some of which goes back as far as 2001,” he told reporters in Pretoria. 

“The value of irregular expenditure that is reported in the annual financial statements of both the [department’s] main vote and the PMTE has increased substantially to a combined figure of R34.9-billion. In a word [it is] shocking,” said Nxesi. 

He said irregular transactions did not necessarily mean fraud had been committed. “The department may have obtained value through such transactions although some technical discrepancies occurred during the procurement or payment process.” 

He said the irregular expenditure was caused by incomplete documentation, incorrect approval of transactions, non-competitive bidding processes, incorrect calculations, and emergency procurement for non-emergency situations. The matter was uncovered during the department’s review of all transactions dating back to 2009/10. Nxesi said he would table his department’s annual report in Parliament on Tuesday. 

The extent of irregular expenditure in the public works department will be laid bare and legal processes will be pursued, minister Thulas Nxesi said on Monday.
“I am doing this because I believe to promote good governance you need to be transparent and accountable. That transparency will help expose any irregularities,” he told reporters in Pretoria.

“Accountability for all of us is the culture I am trying to inculcate at public works. That is my philosophy. We have always been in the public eye about scandals, but we are turning that around now.” Nxesi said efforts to improve the department had unearthed irregular expenditure running into billions of rands. – Sapa

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