Treasury seeking condonement for R769m irregular spend caused by 'lost memo'
National Treasury will seek a condonement in the 2018/19 financial year over the misplacement of a memo which caused the department to incur irregular expenditure amounting to R768.9-million according to Auditor General Kimi Makwetu. The irregular expenditure is for the 2017/18 financial year.
Because all departments must apply to have wayward spending condoned by either National Treasury or “a relevant authority”, according to public expenditure guidelines, National Treasury will have to get approval from Parliament’s standing committee on public accounts if it is to be condoned for this irregular expenditure.
National Treasury Director General Dondo Mogajane told the standing committee in Parliament on Tuesday that the misplacement of the memo in question for a financial management program caused irregular expenditure to reflect as R769.2-million, but that this would be addressed.
“We still believe that we are in a good state, despite the matter that the deputy minister has already raised.
The R769-million of irregular expenditure is a serious issue and we should not be in this space.
We should be a model of excellence to other departments and entities,” said Mogajane.
Mogajane said in the annual financial statements R369-million out of the total of R769.2-million resulted in the “mis-location”. He said, however that the memo was, in fact signed by the accounting officer at the time, namely the director general.
“At least half of that was related to one memo that had already been sent through. We only found the memo [with the necessary approval] by the former director general of R369-million after the reports were finalised. Half of that could have been addressed the right way.
“Since the memo approved by the accounting office was located after the audit report was issued after the events following the reporting date, the adjustment will be processed in the 2018/19 financial year through the normal condonement process,” said Mogajane.
Makwetu also noted material impairments of R23-billion which was recognised in the department’s financial statements as a result of investment in the beleaguered South African Airways.
He also noted R67-million in fruitless and wasteful expenditure for services in support of the Integrated Financial Management System which were not received.
Makwetu said the internal memo for approval of fund transfers relating to the Municipal Finance Improvement Program to the Government Technical Advisory Centre was not signed by the accounting officer.
Members of the committee implored the National Treasury delegation to improve on their audit outcomes, given their role in holding other departments and entities accountable for their supply chain management. — Fin 24