Special powers to recoup wasted public funds
SENIOR government officials will soon have to dig deep into their pockets to pay for waste of taxpayers’ money and face investigation if they fail to account for public cash.
A new law giving Auditor-General Kimi Makwetu sweeping powers to recoup money blown on unauthorised, irregular, fruitless and wasteful expenditure will be finalised before the end of this year.
The estimated cost on implementing the additional powers of the auditor-general is just under R34 million a year for the first three financial years after the promulgation of the law.
Amendments to the Public Audit Act were published in the Government Gazette on Friday and will see Makwetu’s office going after senior public servants should they fail to provide satisfactory explanations for not recovering losses incurred by the departments or state-owned entities they head.
The officials will pay for failing to collect money due to the state and has been improperly paid. ”The debtor must pay the debt to the auditor-general within 180 days or in accordance with any agreed time frame,” reads the proposed new law.
A debtor aggrieved by the auditor-general’s decision to recover any loss may go to the high court for a judicial review.
The Public Audit Amendment Bill also empowers Makwetu to refer adverse audit opinions to appropriate bodies for investigation and his office must be informed of the progress and final outcome of the probe.
State entities which owe the auditor-general for services will have the debt deducted from their National Treasury allocations if Treasury is of the view that the auditee has financial difficulty to pay.
However, provincial and national government departments are exempt from this.
The debt to be defrayed from the National Treasury allocation should not exceed one percent of the auditee’s total current and capital expenditure.
In the memorandum explaining the objectives of the bill, Parliament’s standing committee on the auditor-general notes that efforts by Makwetu’s office to assign consequences for poor financial and performance management through audit reports have yielded mixed results.
”Year on year, the auditor-general reports astronomical figures of unauthorised, irregular and fruitless and wasteful expenditure,” reads the memorandum.
In November, Makwetu revealed that irregular expenditure by government departments and state-owned entities had ballooned by over 55% in 2016/17 compared to the previous financial year to over R45 billion. The auditor-general uncovered irregular expenditure of R29bn in 2015/16.
The proposal to change the law was first made by angry MPs after Makwetu presented his report on national and provincial audit outcomes in 2016.
The auditor-general will now be allowed to provide services to international associations, bodies, institutions and organisations on condition that prior approval is granted and this will not affect the office’s efficiency or strain its resources.