Reckless spending in FS increases by 181%: Auditor-General

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Auditor-General (AG), Kimi Makwetu PHOTO: SowetanLive

The latest report by the Auditor-General (AG), Kimi Makwetu, has revealed that irregular expenditure in the Free State has increased by 181% in comparison to last year. Irregular expenditure in the province for 2016-17 financial year stands at a whopping R3,5 billion.
The report, which was published last week Wednesday, also revealed sectors with the highest amounts of irregular expenditure as per the report are: Health, which spent over R11 777 million; Transport, which spent R6 378 million; and finally, Education, which spent R6 090 million in irregular expenditure.
The country’s total irregular expenditure stands at R45, 6 billion, thereby signalling an increase of over 55% compared to last year’s figure. “The AG says this amount could be even higher, as it does not include the irregular expenditure of the auditees where the audits are still ongoing”, the report reads.
While Makwetu revealed that much of the expenditure emanated from previous years, 78% of the irregular spending was identified and disclosed by the audited entities, while 22% thereof was unearthed during the audits.
Poor supply chain management was a recurring theme in the reasons for irregular spending as it accounted for over 89% of cases reported of irregular spending. Makwetu further categorised the Free State, North West, Limpopo as well as Mpumalanga as “high-risk environments” when it comes to supply chain management.
While he admitted that the national environment also finds itself in a medium-to-high risk environment, he said this risk poses a threat to the financial health of departments and entities, which could negatively impact on the delivery of key national as well as provincial projects.
He further blamed “lack of accountability and commitment to a clean audit” as some of the reasons why Free State and North West provinces find themselves lagging far behind other provinces such as the Western Cape and Gauteng in providing clean audits.
The AG revealed that most auditees had the required policies and processes to ensure that transgressions and fraud are identified and acted upon, but chose not to use these, which he said is an outright indication of a lack of commitment to accountability. “Of the 99 auditees his office audited where there were allegations of financial and supply chain management misconduct and fraud, a third did not investigate the allegations and at 32% investigations took longer than three months,” the report reads.
Makwetu further cautioned that for as long as the leaders at these entities do not account for transgressions committed, an environment prone to fraud and corruption will thrive. He further stated that the country cannot allow money intended to serve the people to be lost. To access the full report, visit www.agsa.co.za. Then under the documents tab, click on PFMA 2016-2017 link, which will lead you to a full media release and report by the AG. Report compiled by Pulane Choane – 
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