DESPITE leading with the highest number of clean audits, the Western Cape has been warned against growing irregular expenditure which stood at more than R280 million.
This week the auditor-general, Tsakani Maluleke, released the 2019/2020 audit outcomes for national and provincial departments and their entities.
The Western Cape continued its streak of the highest number of clean audits after 14 of the 20 auditees maintained their clean audit status.
“There has been a solid pattern of good audit outcomes in the Western Cape but the rise in irregular expenditure is of concern. The increase was due to non-compliance with supply chain management prescripts,” said Maluleke when praising the province.
Of the province’s 14 departments and six public entities, the department of health was praised for receiving a clean audit for two consecutive years.
The province also incurred no unauthorised expenditure and R118 000 in fruitless and wasteful expenditure from the department of the premier, department of agriculture as well as the provincial treasury.
However the province did incur R288 million in irregular expenditure.
“Irregular expenditure increased significantly to R288 million, the department of human settlements accounted for 92% of the provincial irregular expenditure as a result of awards made in prior years where we concluded in the current year that the bid specifications had been biased,” read the report.
“The number of supply chain management findings also increased, if not addressed these could result in an increase in future irregular expenditure.”
Spokesperson for the Department of Human Settlement Nathan Adriaanse said the irregular expenditure came as a result of a decision taken to not disqualify companies that had submitted bids but did not have offices in the province.
“The accounting officer indicated the companies that (were) disqualified due to them not having an office in the Western Cape should be approved for appointment as the department cannot disregard a service provider due (to) them not having a Western Cape address,” he said.
“The accounting officer’s recommendation resulted in companies not having an office in the Western Cape being considered as successful bidders during the evaluation process and subsequently included in the framework agreement, which further supports the fact that the bid specifications were drafted in a biased manner. The department needed to cancel the bid and re-advertise it to allow all other suppliers from areas out of the Western Cape a fair chance at the opportunity.
“In addition, this results in irregular expenditure amounting to R262,5m consisting of R135,710m for the financial years 2014/2015 to 2018/2019 and R127,528m for the financial year 2019/2020.
“There was no malicious behaviour by any official and the department did not suffer any loss. The department submitted the application for the condonement of the irregular expenditure to the Provincial Treasury and we are awaiting the final outcome of the request.”
The provincial legislature as well as the education department were listed as two other entities in the province that contributed to irregular expenditure of R3m each.
In praising the province’s officials, Premier Alan Winde said: “Despite the many challenges created by the national government’s budget cuts and the Covid-19 pandemic, our provincial ministers, heads of department and hard-working officials have demonstrated that corruption and financial mismanagement will never be tolerated in this province.”