PRETORIA - In the wake of significantly bloated irregular expenditure, running into billions of rand, by the South African government departments and State-owned entities, Auditor-General Kimi Makwetu on Wednesday said he hopes his office’s power will soon be bolstered, enabling him to tackle reckless and irregular spenders of public funds.
“We have put in place a mechanism to deal with this matter through our Standing Committee on the AG in Parliament to ask them to assist us in getting our powers reviewed," Makwetu said in Pretoria while releasing the 2016-17 consolidated general report on national and provincial audit outcomes.
"When we look at a four year trend of irregular expenditure, we can be able to say this is not going to become a multi-year issue, what we are looking for in terms of these powers is a situation where Parliament allows us to pick up these items especially irregular expenditure and refer them to appropriate investigative agencies, to get to the bottom of what is behind this type of irregular expenditure,” Makwetu said.
“We feel that short of leaving these things the way they are, they fester into the environment and they become big numbers over a number of years. Whereas we can make an intervention as an audit office, to say, we have identified sufficient audit evidence through the audit to warrant the need for these areas of irregular expenditure to be investigated so that the appropriate consequences can be attached to it. That process is still underway and we are hoping that by end of this month, our Committee would have finalised the proposed amendment to the Public Audit Act, giving us a much stronger tool.”
Ealier, Makwetu revealed that irregular expenditure by government departments and State-owned entities has ballooned by over 55 percent in 2016/2017 when compared to the previous financial year, topping R45 billion. The AG’s office was basing on a figure of R29 billion irregular expenditure in the 2015-2016 cycle.
“Irregular expenditure has increased by 55 percent since the previous year to R45.6 billion. This amount could have been higher, as it does not include the irregular expenditure of auditees where audits are still ongoing, including at Prasa which had an irregular expenditure of almost R14 billion last year,” said Makwetu.
“Furthermore, 25 percent of the auditees disclosed that they had incurred irregular expenditure but that the full amount was not known, while 28 auditees were qualified as the amount they had disclosed was incomplete.”
The Auditor-General said had the irregular expenditure of entities whose audits have not been completed been factored, the total amount of irregular expenditure could rise to as high as R65 billion. The number of entities incurring irregular expenditure has also increased to 265.
Makwetu said the significant increase can be attributed overall to continued supply chain management weaknesses. He said “although deviations are allowed, we found that it had often not been approved, or if approved, the deviation was not reasonable or justified”. Auditees in KwaZulu Natal, the Free State, Limpopo and the Eastern Cape were the main contributors to the significant increase in irregular expenditure. Makwetu said the sectors with the highest amounts of irregular expenditure were health – R11.77 billion; transport R6.37 billion; and education R6.09 billion.
- African News Agency (ANA)