Defence Department gets a rocket for wasteful spending

CAPE TOWN — Auditor-general Kimi Makwetu has castigated the Department of Defence for incurring R678m in irregular, fruitless and wasteful expenditure.

Its financial statement received an unqualified audit opinion, but Makwetu raised concerns about its internal controls, leadership and management of procurement contracts and expenditure.

The processes the auditorgeneral flagged will come under scrutiny because the department is pushing to lease a jet for President Jacob Zuma for official travel.

The department often failed to pay money owed in the 30 days prescribed

Makwetu said the department often failed to meet contractual obligations and to pay money owed in the 30 days prescribed in the Public Finance Management Act.

“Effective steps were not taken to prevent irregular expenditure of R671m and fruitless and wasteful expenditure of R7.1m, as disclosed [in] the financial statements.”

Twenty supply-chain management-related investigations conducted by the department’s investigative unit that were still in progress during the time of the audit, could affect its financial performance, Makwetu said.

The auditor-general also raised issues involving the department’s accounting officer, saying he had failed to exercise sufficient oversight of financial reporting regarding capital asset complaints.

This had resulted in material adjustments to the department’s financial statements.

“The accounting officer did not ensure sufficient monitoring of controls over the overall process of reporting on the performance

Investigations still in progress during the audit could affect financial performance

information, which resulted in material adjustments to the performance report,” Makwetu said.

Sam Gulube, secretary of defence in the director-general’s office, said a review project implementation team had been formed to make the department more efficient.

This plan consisted of two primary work packages, he said.

“The first [consists of] interventions that can be pursued within the current budget allocation and which will improve organisational efficiency.

“The second [includes] interventions that need additional funding and which will stabilise and improve operational performance,” Gulube said.

The department had signed a memorandum of understanding with the Department of Small Business Development in which it agreed to migrate from 30% expenditure on small and mediumenterprises to more than 50% in the next five years.