Bhisho bid to halt irregular spending
THE provincial departments of education and public works, the worst culprits in the Eastern Cape’s irregular expenditure of R2.4-billion, say they have set up mechanisms to correct the problems.
This follows the 2016-17 audit reports released by auditor-general Kimi Makwetu this week.
Of the R2.4-billion, education was responsible for R1.9-billion and public works R303-million. Makwetu said accountability at education required intervention as irregular expenditure included an adjustment of R1.1-billion to correct under-disclosures discovered in the previous audit.
Last week, education spokesman Loyiso Pulumani said that for the past five years, the department had not had a process in place to identify, record and report irregular expenditure.
As a result, the department received qualified opinions for irregular expenditure from a “completeness perspective”. He said they had embarked on a restatement and correction process to address the cause of their qualified audit.
“The current year qualification is on the basis of validity. All the supporting documents have been identified to be correct and are available now.”
Public works spokesman Mphumzi Zuzile said the department now had systems in place to prevent irregular expenditure. These included:
● Supply chain management (SCM) bid committees were required to scrutinise procurement documentation prior to recommending an award;
● The pre-audit unit was responsible for verifying and certifying; and
● Training and awareness in SCM procurement, and changes in legislation.
Zuzile said a review of these systems had revealed deficiencies that weakened internal control and resulted in repeat negative findings.
“The main contributors to the irregular expenditure were payments on expired lease agreements and expired security management contracts. An investigation was commissioned [into] prior year transactions which were not condoned,” he said.
UDM MPL Max Mhlati said that until education and health, which consumed most of the provincial budget, received clean audits, the province could not be proud of an otherwise remarkable improvement in audit findings. The department of health received an unqualified audit opinion with findings.
“They must get clean audits. The majority of the unqualified outcomes have matters of emphasis. If those matters are not addressed, they will go back to getting a qualified opinion.”
Mhlati said irregular expenditure could not be divorced from corruption.
DA MPL Bobby Stevenson said education had questionable expenditure patterns. “The underlying problem is lack of leadership. We need strong MECs and heads of department to ensure accountability and consequence management.”
ANC chief whip Mzoleli Mrara said: “The problem with education is that there are old horses in the middle management of the department – people who know that whatever they do they will not be touched. There is this layer of chief directors and directors that is plunging the department into serious problems.”
He said education had a dysfunctional risk management system and a poorly performing internal audit committee.