Vets department books ‘a mess’

Godi said by now it should have had financial systems in place

FOR the first time since democracy, the standing committee on public accounts (Scopa) had to cancel its hearings on the Department of Defence and Military Veterans, says committee chairman Themba Godi. This was because the department’s books were not in order.

The hearings were canned due to a lack of financial systems and controls, Godi said.

Department of Military Veterans spokesman Mbulelo Musi did not dispute Godi’s statement and said a turnaround strategy was being put in place.

Godi said the department received a disclaimer as the auditor-general could not confirm the opening or closing balances due to a lack of evidence. The department previously fell under the Department of Defence, but in April 2013 started operating independently.

Godi said that by now it should have had proper financial systems in place in order to deliver services to military veterans, but non-compliance, among others, had resulted in 25 percent of the department’s expenditure being irregular.

“Scopa was told that the absence of leadership and guidance in the financial environment, coupled with the fact that the junior staff that performed duties of the chief financial officer, coming from various departments, contributed to the disclaimer.

“The department told Scopa that senior management was placed on special leave after findings of an internal audit that investigated irregular expenditure and non-compliance,” Godi said.

He said it became clear that key personnel, such as the accounting officer, chief financial officer and director-general of corporate services, were absent at a critical period. “The fact that the department has not responded to any of the monthly and quarterly reports that National Treasury has sent shows a serious lack in finan- cial management systems.”

The Treasury has also indicated to Scopa that it has a serious problem with the department not paying the benefits with the budget allocated to it. In the 2013/2014 financial year, it only spent 47 percent of its budget. By January 2015 it had spent only 38 percent of its allocated budget.

Godi said there were military veterans in need of benefits. “Since 2009 until now no pension has been paid, no house has been built. There are serious issues here that Scopa and the National Treasury think that the portfolio committee on defence and military veterans should look into.”

Godi added that an action plan was needed before the end of the current financial year in order for the department to move forward.

“This is a crucial department that should exist and should have its own budget. The state cannot put money into a department that has no proper financial systems. It would be totally irresponsible for Parliament to allocate a budget to a department that cannot assure South Africans that it will be reliable custodians of that money,” he said.

Musi said a comprehensive response was being prepared.

“We noted that there are serious issues. However, we are putting a turnaround strategy (into place). We have looked at all the issues raised by the auditor-general and we recognise there are weaknesses.”

A turnaround strategy included financial control systems, strengthening of management and better accountability. “We are also working on ensuring we strengthen capacity and skills. It is a new department and we are comfortable we will overcome the challenges,” he said.

Musi said the turnaround strategy would be implemented this financial year.

“The DG (the department’s director-general) will very soon explain to Scopa how the changes will be effected. We’ll keep the public informed.”