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Parliament’s watchdog body, Scopa, has given cabinet ministers 60 days to report back to Parliament on the steps they have taken to sort out the financial and accounting chaos in their departments.
Irregular, wasteful and fruitless expenditure last year amounted to more than R30 billion, and year after year the Auditor-General presents damning findings of bad bookkeeping, auditing failures and fraud.
Now Scopa has lost patience and is demanding answers within the next two months, followed by quarterly progress reports thereafter.
Scopa chairman Themba Godi (African People’s Convention) tabled several reports in the National Assembly on Thursday which paint a sorry picture of the state of financial management at nine government departments and entities.
“What we see generally in all these departments is that the key causative factor is weak internal controls, which lead to all manner of problems that the Auditor-General has identified, including the challenge of asset management – which in the case of correctional services has been an issue of qualification since 2005.”
Godi said the time had come for these departments and entities to get their houses in order and for “action to be taken against the officials involved”.
He was quick to point out that “irregular expenditure” did not necessarily mean that money had vanished – only a forensic investigation could determine this – but that money had been spent “without following due process”.
In the case of the Department of Public Works, irregular expenditure alone amounted to more than one third of the R30bn total.
Of concern to MPs was that, in many cases, the Auditor-General noted that the department “did not have adequate systems in place for identifying and recognising all irregular expenditure”.
This means that the multi-billions in irregular spending identified last year could be just part of an even bigger problem.
For more than a decade, the Public Works Department– described by MPs as “dysfunctional” – has been unable to put together an accurate list of properties owned by the government.
This prompted the Auditor-General to note in his report for 2010/11 that the department “did not provide sufficient and appropriate audit evidence to confirm the completeness, existence, rights, valuation and allocation of properties recorded in the immovable asset register” valued at more than R3bn.
And after it devalued assets to the tune of R6bn last year – in an attempt to correct “misstatements” of the year before – the Auditor-General could find “no supporting documents” to verify the department’s claim.
In the case of fruitless and wasteful expenditure, Godi noted that taxpayers lost out when government officials failed to get value for money – “and for which we always insist that action be taken against the officials involved”.
Again, the Public Works Department was one of the biggest culprits, admitting to wasting R6.7m, but the Auditor-General noted that this amount “could not be confirmed”.
Scopa has recommended that “monies be recovered from employees who were responsible for incurring such fruitless and wasteful expenditure”.
With the department failing to keep proper records, the Auditor-General could not verify further spending of R9.4bn.
“The committee recommends that… responsibility for the safeguarding of documents is clearly assigned to individuals and action is taken if documentation is lost,” one of the Scopa reports tabled yesterday suggested.
The leasing environment – which has already cost one minister her job – is another problem area at public works.
Recently appointed minister Thulas Nxesi has ordered a review of all government leases and the committee noted and welcomed this in its report.
The committee nonetheless noted that the R12bn in leases claimed by the department last year was, in fact, understated by a staggering R2.6bn.
Godi appealed to National Assembly Speaker Max Sisulu to “strengthen Parliament’s own monitoring mechanisms” so the legislature could keep a close eye on progress in the coming months.