Gross irregular state spending up 55%

‘This is taxpayers’ money being misspent – this country is in dire straits and will be downgraded’

TAKE your money out of South Africa. This country is in deep trouble. This is the shattering advice given by Efficient Group chief economist Dawie Roodt after the release of the auditorgeneral’s report on irregular expenditure by government departments and entities.

The report shows irregular expenditure increased by 55% since the previous year to R45,6 billion and could rise as high as R65bn.

Auditor-general Kimi Makwetu says this amount could be even higher, as it does not include the irregular expenditure where audits are ongoing. This includes the Passenger Rail Association of SA, where irregular expenditure last year was almost R14bn.

Kwazulu-natal is among the provinces that were the main contributors to the increase in irregular expenditure. Free State, Limpopo and the Eastern Cape are included in that list.

The sectors with the highest amounts of irregular expenditure are health, transport and education.

In addition, the auditorgeneral reported that 25% of the auditees disclosed that they had incurred irregular expenditure but that the full amount was not known, while 28 auditees were qualified as the amount they had disclosed was incomplete.

Roodt said the country had reached a stage at which it could not no longer afford such outcomes.

“This is the taxpayers’ money that is being misspent, which means that the state needs to cut back on its expenditure. This country is in dire straits,” he said.

Roodt predicted that the country would soon be downgraded, which would force the economy into recession.

According to his calculations, he believed the state needed to cut its expenses by 6% to 8% next year, “which is highly unlikely”.

“We have basically reached the end of the line and pushing the economy into recession would be the only option,” Roodt said.

“You have to be cruel to be kind, but politicians think like this.

“My best advice that I give to my clients and I would tell to your readers is, take your money out of the country.”

At a national level, there was a slight improvement in the outcomes with the number of clean audits increasing to 30% of the total population.

The Western Cape and Gauteng continued to produce the best results.

“It is also clear that these results are being sustained from year to year, due to leadership don’t emphasising a culture of accountability,” said Makwetu.

He also recognised improvements in the audit outcomes in the Eastern Cape and Limpopo, attributing these positive trends to the leadership roles of the provincial treasury and the premier.

In contrast, the auditorgeneral’s outcomes in Mpumalanga, the Northern Cape and Kwazulu-natal were “erratic” over the past four years.

Makwetu reported this was caused by a that lack of urgency of leadership in responding to the root causes of the audit outcomes in those provinces.

Kwazulu-natal leader of the DA Zwakele Mncwango said he found the report “shocking”.

With the constant release of such reports, “South Africans seem somewhat accepting of corruption”, he said.

Mncwango criticised the lack of accountability, saying that officials were not following proper procedures when it came to money “because they know they will be protected by the politicians. We need proper leadership and the will to stop irregular expenditure,” he said.

“They want to loot state funds and when they are in office they want to know when is it their turn to eat.”

Mncwango commended the Western Cape and Gauteng for producing the best results, saying that “the reality showed that where the ANC does not govern, you can improve”.

While the overall audit outcomes showed a noticeable improvement, Makwetu reported that progress was hampered by “an emerging trend of departments failing to manage their finances”.