Cape Town - The Western Cape Department of Economic Opportunities is embroiled in a bitter fight with the auditor-general.
The dispute has led to the department’s financial records for the past year going unaudited because of disagreements over a “technicality”.
Now MEC Alan Winde has indicated that his department was willing to approach the courts to settle the matter in order to reach a resolution.
This comes after the auditor-general’s office requested the department alter its recordings of payments of R266million to Casidra and Hortgro, from transfer payments to goods and services, before it could give an opinion on the department’s 2016/2017 audit.
The entities provide services on behalf of the department to farmers and communities that range from flood and drought relief to programmes that support emerging farmers.
According to Auditor-General Sazi Ndwandwa, the request for a change in the department’s financial records came after new accounting standards were put in place and required the payment be changed, from transfer payments to goods and services, because of the way contracts with both entities were structured.
But the department is arguing that shifting amounts on a balance sheet was not all that will happen if they do as the auditor-general asks.
“We have come to the end of that year and have come into the year new and we still don’t have a finding from the auditor-general based on this technical issue of whether the transfer money we send to organisations are either transfer payments or goods and services and it goes around to whether it needs to go to procurement or not,” said Winde.
“It is mostly for dealing with drought relief, dealing with floods, or putting land reform in place; it is not like we are buying goods and services for the department, we are actually going out there and doing things in agriculture.
“I personally am prepared to fight it all the way, I believe that going another way will cost more money.”
Ndwandwa said both his office and the department had got to a point where they interpreted the new accounting measures differently and needed National Treasury to make a ruling on the matter.
“The department is saying if we account the way you as the auditor-general want us to, when we account our financial statements, it will show us as having broken the law as far as appropriations are concerned because these payments were recorded as transfer payments, but now we come and account for them as goods and services which would mean there is a discrepancy for what was approved,” he said.
Ndwandwa stressed that his actions were not about catching the department out, adding that his office could not issue an audit outcome before the matter was resolved.
Committee chairperson Beverley Schafer reprimanded both parties, saying that the ongoing dispute made a mockery of the legislature’s job.