Durban - Three key national government departments have come in for stick from the auditor-general for their continuing poor financial performance.
The departments of Health, Education and Public Works jointly share almost half of the national budget and have come under the spotlight for continued poor financial performance during the 2014/15 financial year.
They were the subject of scrutiny of their supply chain management and procurement services when Auditor-General Kimi Makwetu released the 2014/15 audit report yesterday. Makwetu called for the intervention of the departments’ executives to fix their problems.
He called these departments the “Big Three” and said they had to be made a priority in terms of their financial reports because they provided basic services.
“These departments still have the worst outcomes,” Makwetu said. He said that the attention of the co-ordinating or monitoring departments, executive authorities and oversight structures had to focus on them to fix the problem.
He was giving his annual performance report from his audit of 468 organisations, which included 167 national and provincial departments and 301 public entities. The total budget across them was R1.1 trillion for the year under review, and he said there had been a marginal improvement in audit outcomes.
The number of those with clean audits had improved slightly, from 118 to 131 from the previous audit.
Regressions
“In Gauteng we found that 54% of auditees produced clean audits,” he said. The Western Cape had 83%, KwaZulu-Natal 22% and the Free State 32%, while 23 of these provinces’ ministerial portfolios contributed to the 65 clean audits in national government.”
Mpumalanga, the Northern Cape and North West Province had experienced regressions in the number of organisations with clean reports.
“It is worthy to note that 70% of auditees with clean audits the previous year were able to sustain their clean audits.”
Makwetu said irresponsible spending was the direct result of weaknesses in supply chain management.
“The failure to follow competitive or fair procurement processes is the key driver of this,” he said. Those weaknesses were responsible for the irregular expenditure of R25.7 billion, an expenditure that did not necessarily mean money was wasted or fraud was committed in all instances.
“The absence of follow-up and real consequences around these transactions at a number of auditees creates more vulnerability … resulting in possible significant losses to the fiscus,” said Makwetu.
He said some of the main contributors to wasteful expenditure were Gauteng’s Transport Department with R251 million, and the province’s Health Department with R160 million, and the Eastern Cape Health Department with R74 million.
Makwetu said the so-called big three took over a huge chunk of the total budget, but only managed three clean audits in 30 entities.
He said the departments of Basic and Higher Education had a combined budget allocation of R257 billion. Health was allocated R146 billion while Public Works had R32 billion for the year under review.
This should be underpinned by sound internal controls and good human resource management, including enhancing personal accountability and consequence management, he advised.
THE MERCURY