The African Christian Democratic Party (ACDP) says while it welcomes the reduction in the irregular expenditure, the amount incurred by national and provincial departments on the audit outcomes released by Auditor General Tsakani Maluleke is still unacceptably high.
ACDP Chief Whip Steve Swart also expressed concern at the number of clean audits and those who did not disclose their irregular expenditure.
Swart says, “What is more concerning is that only 17% of national and provincial departments receive clean audits a staggering 31 percent or 118 departments did not disclose their irregular expenditure at all so this figure could be much higher. It is shocking that there were instances where documentation supporting transactions amounting to billions of rands could not be found. Supply chain management and procurement of goods and services remain a serious concern. This is where corruption and irregular expenditure takes place.”
While tabling the government audit outcomes report at a press briefing in Pretoria, Maluleke said irregular expenditure among national and provincial government departments decreased to R54 billion from the R66 billion in the previous year.
She said despite the decrease the number is nothing to celebrate as 31% of the auditees failed to disclose irregular expenditure. The AG’s report shows that overall, audit outcomes improved with 66 auditees improving and 35 regressing.
Maluleke says her office could not audit R2 billion worth of contracts due to missing or incomplete information. She says auditees continue to have a poor track record when it comes to dealing with irregular expenditure and ensuring accountability. She says 69% of the auditees did not comply with legislation which is lower than the 73% recorded in 2020.
The AG’s report however showed improved audit outcomes in the Eastern Cape, Free State, Limpopo and Mpumalanga province among others.
Auditor-General tables 2019-2020 consolidated audit outcomes:
Maluleke says, “There was some doubt about the completeness, about the irregularities expenditure disclosed. This number must also be understood in the context where it doesn’t include Transnet and it doesn’t include Eskom who respectively reported figures of R56 billion and R11 billion for the year ended March 2020. So while we might see a reduction from R66 billion to 54 billion, there is no reason to celebrate.”
The AG says unauthorised expenditure which is as a result of overspending increased from R1.6 billion to R18 billion. She says R15 billion worth of the overspent budget resulted from the early payment of the social grants in response to the COVID-19 lockdown measures.
“If we go back and understand what are these indicators that the AG considered when we look at when we consider the roots to financial health. It is the inability to pay creditors on time, it is the inability to collect debtors in a way that one should, on time. It is operating on a net deficit for the year where the revenue is acceded by expenditure for the year. It’s about auditees whereby you’ll find that they’ve actually spent next year’s budget this year,” says Maluleke.
The report also found that 231 auditees lost R2.3 billion in fruitless and wasteful expenditure in the 2019 – 2020 financial year.
Maluleke says there should be urgency in dealing with material irregularities to prevent further wastage, recover money and effect consequences for wrongdoing.
She says, “We are continuing to have a culture where there is tolerance for lack of compliance, where there is tolerance for people transgressing from that which has been set out, and when we flash this number of an accumulated closing balance of irregular expenditure of R263 billion, our main message is this, the system has much work to do before we can push back from telencephalon of transgressions.”
Maluleke says state-owned entities that disclosed uncertainty in their financial statements regarding their ability to continue as a growing concern include Eskom, Sanral, Denel and the SABC among others.
Auditor-General Tsakani Maluleke briefs media on Audit Outcomes:
There should be urgency in dealing with material irregularities to prevent further wastage, recover money and effect consequences for wrongdoing and all role players should thus work together to ensure the swift resolution of these matters’ further says AG Maluleke. #AGreport
— Auditor-General SA (@AuditorGen_SA) March 31, 2021
By 28 February 2021, we had notified the accounting officers and authorities of 75 material irregularities. They all related to non-compliance with legislation that resulted in a material financial loss. The estimated financial loss associated is R6,9 billion #AGreport pic.twitter.com/x5Tdwp1stv
— Auditor-General SA (@AuditorGen_SA) March 31, 2021
2019- 20 provincial departments and entities audit outcomes – Kwazulu-Natal #AGreport pic.twitter.com/4UEVu6Vauy
— Auditor-General SA (@AuditorGen_SA) March 31, 2021
2019- 20 provincial departments and entities audit outcomes – Kwazulu-Natal #AGreport pic.twitter.com/4UEVu6Vauy
— Auditor-General SA (@AuditorGen_SA) March 31, 2021
2019- 20 provincial departments and entities audit outcomes – Western Cape #AGreport pic.twitter.com/WkumJmLzZy
— Auditor-General SA (@AuditorGen_SA) March 31, 2021
2019- 20 provincial departments and entities audit outcomes – Northern Cape #AGreport pic.twitter.com/54lkn4j14g
— Auditor-General SA (@AuditorGen_SA) March 31, 2021
2019- 20 provincial departments and entities audit outcomes – Mpumalanga #AGreport pic.twitter.com/tPbBE2gTqz
— Auditor-General SA (@AuditorGen_SA) March 31, 2021
2019- 20 provincial departments and entities audit outcomes – Gauteng #AGreport pic.twitter.com/4IvJhGXido
— Auditor-General SA (@AuditorGen_SA) March 31, 2021
2019- 20 provincial departments and entities audit outcomes – Free State #AGreport pic.twitter.com/QmMh4J54uO
— Auditor-General SA (@AuditorGen_SA) March 31, 2021
2019- 20 provincial departments and entities audit outcomes – Eastern Cape #AGreport pic.twitter.com/PeAkRwvrcd
— Auditor-General SA (@AuditorGen_SA) March 31, 2021
