Cape Town - Auditor General South Africa (Agsa) has revealed that 41 national departments incurred R1.52 billion fruitless and wasteful expenditure over the past five years.
This emerged when head of auditing at Agsa Bongi Ngoma briefed the standing committee on appropriations on fruitless and wasteful expenditure and material irregularities on Friday.
“Over the last five years R1.52bn was incurred as fruitless and wasteful expenditure by 41 departments. Twenty one of the 41 have incur(red) fruitless and wasteful expenditure on consistent basis for the past five years,” Ngoma said.
The highest contributors to the fruitless and wasteful expenditure are Department of Defence with R460.09m, followed by National Treasury R339.47m, Basic Education Department R106.85m, Tourism Department R92.95m and Environment, Forestry and Fisheries Department R87.94m.
Ngoma said the amount incurred in fruitless and wasteful expenditure fluctuated over the past five years.
She said the incurred cost was due to unoccupied government property, licence and software not being used, unwanted goods or services, travel cancellation costs, damage to state property due to negligence and weak project management.
Ngoma told the committee that Agsa issued material irregularity notices to the attention of accounting officers and authorities with R14.7bn estimated financial loss.
The breakdown of the financial loss shows that R3.9bn was incurred in the local government, R2.1bn in the provinces and R8.6bn in the national government.
Ngoma said since October 2021, 233 notices were issued and 327 as at April this year.
She also said the bulk of the material irregularities were procurement and payment environment. Some are in human resource, few in revenue management, interest and penalties as well as fraud and compliance.
Ngoma said if fruitless and wasteful expenditure was left unchecked, it could spell worsening financial health for the government.
“If there is inaction to address the culture of fruitless and wasteful expenditure, it can be costly not only for the state but the citizens who are not getting the services on the ground,” she said.
Ngoma said the financial health of some were of concern and some required urgent attention.
Her report showed that 64 departments accounting for the R407 billion budget were in good financial status.
The financial health status of 79 departments with a combined budget of R850bn were of concern.
Fourteen departments with a budget of R130 billion required urgent intervention.
The report also showed that public entities accounting for R51bn and three state entities accounting for R10bn required intervention.
Ngoma said discipline to comply with legislation and avoid leakages from the public purse should be a natural behaviour, not an exception.
“To turn the tide, proper consequence management should be applied as per legislation, including investigating causes of fruitless and wasteful expenditure, by holding those responsible accountable, recover lost funds and strengthen control environment.
Ngoma said the standing committee on appropriations should continue to hold relevant role-players to account.
Committee chairperson Sfiso Buthelezi said they appreciated the role Agsa played in the accountability eco-system.
“As the standing committee on appropriations, we want to play our role and can play it effectively if we share information,” Buthelezi said.
Cape Times