Irregular expenditure concerns AG

Wednesday, November 1, 2017

Auditor-General Kimi Makwetu says irregular expenditure has increased by 55% since the previous year to R45.6 billion.  

The Auditor-General also warned that the amount could be higher.

He said this when he released the much-anticipated report of the audit outcomes of national and provincial departments for the year 2016/ 17.

Briefing journalists on Wednesday, the Auditor-General said the amount does not include the irregular expenditure of the auditees like PRASA, where the audits are still ongoing.

He also said that 25% of the auditees disclosed that they had incurred irregular expenditure but that the full amount was not known. Makwetu added that 28 auditees were qualified as the amount they had disclosed was incomplete.

The increase, the Auditor-General said, could be attributed to continued supply chain management weaknesses.

“Although deviations are allowed, we found that it had often not been approved or, if approved, the deviation was not reasonable or justified,” he said.

He said that auditees in KwaZulu-Natal, the Free State, Limpopo and the Eastern Cape were the main contributors to the increase in irregular expenditure compared to the previous year.

He said the sectors with the highest amounts of irregular expenditure were health, transport and education.

AG flags state employees doing business with the state

Makwetu said he had over the years addressed concerns of contracts being awarded to government employees and their families without the any declarations being made.

He said although there was no legislation that prohibits making awards to suppliers in which state officials have an interest, the amended Public Service Regulations prohibited employees of departments from doing business with the state from August 2016.

He noted that departments were tasked with monitoring this compliance.

“Based on the findings in just the first six months of implementation, it seems that this responsibility is not being given the attention it deserves,” he said.

The Auditor-General also said that there was an emerging trend where departments and entities continued to contest the audit findings of his office, adding that this trend intensified during the 2016/ 17 financial year.

“It is unacceptable for those we audit to question and challenge the outcome of audits based on evidence and solid accounting interpretations or legal grounds.

“We also acknowledge that many of the accounting and legal matters dealt with in the audits are complex and often open to interpretation,” he said. –  

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