AG tells Department of Energy to get its house in order
AUDITOR-GENERAL Kimi Makwetu has slammed the department of energy for underspending by hundreds of millions of rand and understating its irregular expenditure by further millions.
In the department’s annual report tabled in Parliament yesterday, the AG gave the department a qualified opinion. He said the department had to get its house in order.
In his report, Makwetu found that the department of energy underspent by more than R200 million on various programmes.
In addition, the department understated its irregular expenditure by more than R98m.
The annual report of the department was delayed for several months after Minister of Energy Jeff Radebe requested an extension from Parliament Speaker Baleka Mbete.
Departments and state-owned entities are supposed to table their annual reports in Parliament at the end of September annually. However, they can request an extension if there are outstanding issues.
In his report, the AG said: “The department did not include the required information on irregular expenditure in the notes to the financial statements as required by section 40 of the Public Finance Management Act. The department made payments in the previous year in contravention of the supply chain management requirements resulting in irregular expenditure being understated by R98m.”
The tabling of the report in Parliament yesterday came after the department signed a deal with Saudi Arabia in Pretoria to build an oil refinery for $10 billion (R137bn).
Radebe signed the deal with his Saudi counterpart following an earlier commitment by that country to build a crude oil refinery and petrochemical plant in South Africa.
President Cyril Ramaphosa last year visited Saudi Arabia, among other countries, to raise investments and the Saudis promised to invest $10bn in an oil refinery.
The department received a budget of R8.1bn in the last financial year.
However, the director-general, Thabane Zulu, said in the report the underspending of R200m was 2.46% of the budget.
“The major contributors to this budget underspending were the transfer payments and current payments economic classifications with budget underspending of R177.53m or 2.36% and R21.89m or 3.6% respectively,” stated Zulu.
Meanwhile, Radebe has confirmed that the investment Ramphosa had sought to clinch from Saudi Arabia was successful.