Government aims to drastically cut R63bn irregular expenditure in 2024/25 financial year
Johannesburg - The government has set itself an ambitious target of drastically reducing the R63bn in irregular expenditure by the 2024/25 financial year.
It also wants to achieve clean audits in all national and provincial departments, and state institutions.
The incremental targets are contained in plans approved by Public Service and Administration Minister Senzo Mchunu, which are aimed at evaluating the performance of top government officials as well as their ability to achieve clean audits and eliminate wasteful expenditure.
Auditor-General Kimi Makwetu’s latest report on the audit outcomes of national and provincial governments shows that fruitless expenses have continued to rise with the government losing up to R849m in the 2018/19 financial year, and R4.16 billion of government expenditure recorded as wasteful over the five-year period.
The targets also state that irregular expenditure, which increased to R62.6bn in 2018/19 from R51bn in the previous financial year, must be reduced by 75% by 2024/25.
Makwetu has also indicated that audit outcomes have regressed since 2014-15, with only 80 departments and state institutions improving, and 91 regressing.
In 2018/19, only 100 (or 26%) departments and state institutions managed to produce quality financial statements and performance reports and to comply with key legislation receiving a clean audit, and in 2014/15 clean audits were achieved by 106.
Another R1.365bn was declared unauthorised expenditure, which Makwetu found remained high.
The new key government focus area of supply chain management on which heads of departments will be assessed will be enforced from this year.
Public service and administration director-general Yoliswa Makhasi announced the amendments approved by Mchunu in a circular dated August 30 sent to all heads of national and provincial departments and government components.
The performance management and development system for heads of departments came into effect in April 2018 and included employee and organisational performance, key government focus areas and Makwetu’s audit opinions and findings.
Supply chain management is one of the five key government focus areas in which all the department heads’ performance contracts will be assessed.
According to Makhasi, Mchunu’s amendments were necessitated by changes to the government’s supply chain management policies and will come into effect in the 2020/21 financial year, which started in April.
Department bosses will have immediate targets that include 70% elimination of wasteful and fruitless expenditure and 65% reduction of irregular expenditure.
They will also be required to finalise the awarding of contracts within an average of 100 days, produce risk response plans for the top five supply chain risks and be 100% compliant with the requirement to pay suppliers’ invoices within 30 days.