R20bn of public cash wasted

17 Jan

The Auditor-General’s audited results of government and provincial departments and public entities have painted a picture of huge amounts of public funds being misused by departments and public entities.

More than R20 billion spent by national and provincial departments has been found to have been unauthorised, irregular, wasteful and fruitless expenditure.

Supply chain management, a division through which contracts and tenders are awarded at both national and provincial departments, has been highlighted by the Auditor-General (AG) as a key problem area.

Government’s weakness and lack of expertise in IT has also been mentioned as one of the key contributors to poor financial controls.

The Presidency also failed to obtain a clean audit and incurred R859 000 in irregular expenditure.

Only the departments of Public Enterprises, Environmental Affairs and Science and Technology managed to obtain clean audits.

AG Terence Nombembe on Monday released audited results of departments which saw the national Public Works Department being the only one to receive a disclaimer.

A disclaimer of audit opinion means the department failed to provide sufficient evidence or documentation on which auditors could form an opinion.

Only nine out of 39 national government departments received qualified reports, but Nombembe said he was concerned about the levels of financial control within these departments.

The departments of Defence and that of Justice and Constitutional Development were shown to be the biggest culprits in terms of irregular expenditures with figures of R799.3 million and R420.m respectively.

The Department of Co-operative Governance and Traditional Affairs also incurred irregular expenditures of R419.5m.

The provincial audit report revealed there were many investigations currently under way related to irregular and unauthorised use of public funds by departments and entities.

According to the report, there has been a 12 percent overall increase compared to the previous financial year (2009-10) in the number of provincial departments incurring unauthorised, irregular and fruitless and wasteful expenditure.

The aggregate amount incurred in this regard increased by 25 percent from R16bn in 2009-10 to R20bn in 2010-11.

Departments and public entities at national level incurred more than R4.5bn in unauthorised, irregular, wasteful and fruitless expenditure.

Public entities in provinces, which are also funded by public money, have also increased the amount of money spent in irregular, unauthorised, wasteful and fruitless expenditure.

The number of public entities incurring such expenditures increased from 37 to 52, with an aggregate amount of R318m incurred in this regard.

Nombembe said 36 percent of provincial departments or public entities had commissioned investigations, with most of these in KwaZulu-Natal. “The extent of investigations commissioned suggests a control environment where fraud and financial misconduct are not prevented,”

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Posted by on January 17, 2012 in Corruption


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