Irregular state spending just gets worse
Kimi Makwetu decries lack of action as he reveals amount that is similar to that sought to spark growth
Auditor-general Kimi Makwetu has decried the “lack of consequence” for senior government officials and managers at state-owned entities (SOEs) responsible for millions of rand in unauthorised, fruitless, wasteful and irregular spending. Makwetu stunned MPs on Wednesday when he revealed that government departments and various SOEs were responsible for irregular spending of at least R50bn, up from about R45bn the previous year.
Auditor-general Kimi Makwetu has decried the "lack of consequence" for senior government officials and managers at stateowned entities (SOEs) responsible for millions of rand in unauthorised, fruitless, wasteful and irregular spending.
Makwetu stunned MPs on Wednesday when he revealed that government departments and various SOEs were responsible for irregular spending of at least R50bn, up from about R45bn the previous year.
He was briefing a joint meeting of parliament’s standing committee on public accounts and the standing committee on appropriations on the 2017/2018 audit of national and provincial departments and their entities.
This comes as the government scrambles to reprioritise about R50bn of its budget to reignite economic growth.
The worst offenders in irregular spending include the KwaZulu-Natal department of transport (more than R5bn); the water trading entity (R4bn); Gauteng roads and transport (R2bn) and the department of water and sanitation (R2bn).
Makwetu cautioned that poor financial management in government departments was a major threat to service delivery.
Fruitless and wasteful spending rose from about R1bn in 2016/2017 to R2.5bn. Unauthorised spending was up about 38% to slightly more than R2bn.
Makwetu said these amounts could increase as the audits of SOEs such as SAA and Denel were yet to be finalised.
In general, audit outcomes of public entities regressed from the previous year and over four years. While 82 public entities got clean audits previously, in 2017/2018 only 59 entities did.
Only 25% of national and provincial departments had unqualified audits in 2017/2018.
Makwetu said there was a growing trend by accounting officers to contest audit findings. “Some auditees place pressure on audit teams to change conclusions to avoid negative audit outcome or disclosure [of] irregular expenditure without sufficient grounds,” he said.
Makwetu emphasised that accounting officers who contravene the Public Finance Management Act should be held responsible for the poor audits.
Earlier in 2018, the National Assembly passed the Public Audit Amendment Bill, which seeks to give the auditor-general more teeth. President Cyril Ramaphosa has yet to sign it into law. The law will give the auditor-general the power to refer adverse findings in its reports to investigative bodies, as well as recover funds lost due to failure to adhere to the act from accounting officers.
“While we await the bill to be signed into law, we continue to see a lack of consequence [for] management Our vision is not to discourage creativity and innovation or to enforce punishment, but to encourage accountability and good governance in the public sector,” he said.
Growth sector: Auditor-general Kimi Makwetu told a a joint meeting of parliament’s standing committees on public accounts and on appropriations that irregular spending had grown from R45bn to R50bn in the last financial year.