SOUTH AFRICA - Auditor-General Kimi Makwetu has bemoaned the repeated failures of
national and provincial government to comply with the Public Finance
Management Act, leaving the fiscus vulnerable to waste and abuse.
Mr
Makwetu said on Wednesday in Pretoria that while there had been a
slight improvement in the audit results of the two spheres of
government, they incurred R32m in fruitless and wasteful expenditure in
efforts to prevent further fruitless or irregular expenditure and
losses.
Mr Makwetu was presenting the 2014-15 audit results of provincial and national departments, as well as those for public entities.
The audit covered 468 departments and 301 public entities, which had a combined budget of R1.1-trillion.
Fruitless and wasteful expenditure amounted to R936m for the 2014-15 financial year, down from R1.2bn in 2013-14. In 2014-15, irregular expenditure decreased 27% to R25.7bn, while unauthorised expenditure dropped from R2.6bn to R1.6bn.
"The state of human resource management remains poor in most provinces," Mr Makwetu said.
Nearly a third of the auditees had material findings against them on supply chain management, which made up the bulk of the R25.7bn irregular expenditure.
"Once again the absence of follow-up and real consequence around these transactions at a number of auditees creates more vulnerability for the control weaknesses to be taken advantage of, resulting in possible and significant losses to the fiscus.
"Some losses are probably already materialising through contracts that have been irregularly awarded or extensions to existing contracts being implemented with little regard for the supply chain prescripts promoting transparency and effective spending of public funds," he said.
Auditees that received financially unqualified audit opinions with no findings increased from 118 in 2013-14 to 131 in 2014-15, he added.
Departments that received clean audits increased from 40 to 47, while 84 public entities received clean reports.
Mr Makwetu also emphasised the importance of making the "big three" departments — health, education and public works — a priority in terms of financial reports because they deliver services.
The departments took up R411bn (37%) of the total budget, but only three entities out of 30 which fall under them got clean audits.
Mr Makwetu was presenting the 2014-15 audit results of provincial and national departments, as well as those for public entities.
The audit covered 468 departments and 301 public entities, which had a combined budget of R1.1-trillion.
Fruitless and wasteful expenditure amounted to R936m for the 2014-15 financial year, down from R1.2bn in 2013-14. In 2014-15, irregular expenditure decreased 27% to R25.7bn, while unauthorised expenditure dropped from R2.6bn to R1.6bn.
"The state of human resource management remains poor in most provinces," Mr Makwetu said.
Nearly a third of the auditees had material findings against them on supply chain management, which made up the bulk of the R25.7bn irregular expenditure.
"Once again the absence of follow-up and real consequence around these transactions at a number of auditees creates more vulnerability for the control weaknesses to be taken advantage of, resulting in possible and significant losses to the fiscus.
"Some losses are probably already materialising through contracts that have been irregularly awarded or extensions to existing contracts being implemented with little regard for the supply chain prescripts promoting transparency and effective spending of public funds," he said.
Auditees that received financially unqualified audit opinions with no findings increased from 118 in 2013-14 to 131 in 2014-15, he added.
Departments that received clean audits increased from 40 to 47, while 84 public entities received clean reports.
Mr Makwetu also emphasised the importance of making the "big three" departments — health, education and public works — a priority in terms of financial reports because they deliver services.
The departments took up R411bn (37%) of the total budget, but only three entities out of 30 which fall under them got clean audits.
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