Employment and Labour Department underspent R196 million, says Makwetu
Johannesburg - Auditor-General Kimi Makwetu has found that the Department of Employment and Labour underspent its budget by R196 million in the 2018-19 financial year.
“The department materially underspent the budget by R196176000 on appropriation per programme,” Makwetu said in his report submitted to Parliament.
The department’s administration underspent by R76m, inspection and enforcement services R43m, public employment services R62m and labour and industrial relations services R13m.
Department’s director-general Thobile Lamati blamed the underspending on internal promotions and vacant posts during the financial year.
Lamati also blamed the delay in the delivery of ICT equipment for inspectors and provinces as well as the delay in promulgating the National Minimum Wage Act.
Makwetu also found the department submitted financial statements not in accordance with the prescribed financial reporting framework as required by the Public Finance Management Act.
“Material misstatements of employee benefits, prepayments expenses and irregular expenditure identified by auditors in the submitted financial statements were corrected, resulting in the financial statements receiving an unqualified audit opinion.”
He said the department did not take disciplinary action against some of the officials who incurred irregular expenditure as well as fruitless and wasteful expenditure.
“Effective steps were not taken to prevent irregular expenditure amounting to R3447000. The majority of the irregular expenditure was caused by the non-adherence to procurement and contract management regulations,” Makwetu said.
“Effective steps were not taken to prevent fruitless and wasteful expenditure amounting to R4450000. The majority of the fruitless and wasteful expenditure was caused by damages to departmental vehicles,” he added.
The AG noted the head of department did not exercise effective oversight to ensure proper implementation of the overall process of monitoring of financial transactions reporting.
Employment and Labour Minister Thulas Nxesi said his department had met the annual performance target with an 80% score. He said they now sought to improve on this.
“A priority will be to achieve a clean audit report during this administration,” Nxesi said.
Lamati said they were investigating the fruitless and wasteful expenditure.