Unauthorised expenditure among provincial departments increases to R18 billion: AG

Reading Time: 2 minutes

The Auditor-General Tsakani Maluleke says unauthorised expenditure from overspending of the budget among provincial departments increased from R1.6 billion to R18 billion.

She says R15 billion in overspending was a result of the early payment of the social grants in response to the COVID-19 lockdown measures.

The AG report indicates that the departments which incurred unauthorised expenditure include Social Development, Education, and the Health Department.

The AG says unfair procurement processes and inadequate contract management remain common.

Tabling the national and provincial government audit outcomes report at a media briefing in Pretoria, Maluleke says, “And 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 by the end of the year they have overspent their budget, such that they have unauthorised expenditure. They’ve actually spent next year’s budget this year.”

Auditor-General Tsakani Maluleke briefs the media on national and provincial audit outcomes: 

‘No reason to celebrate’

Maluleke says irregular expenditure among national and provincial government departments decreased to R54 billion from the R66 billion in the previous year. She says despite the decrease the number is nothing to celebrate as 31% of those audited failed to disclosed irregular expenditure.

Maluleke says her office could not audit R2 billion worth of contracts due to missing or incomplete information.

She says many departments have a poor track record when it comes to dealing with irregular expenditure and ensuring accountability.

“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 R54 billion, there is no reason to celebrate.”