Fin24

AG: State spent R21.1bn irregularly

2011-10-19 18:33

Cape Town - Government departments and entities last year racked up irregular spending of R21.1bn Deputy Auditor General Kimi Makwetu said on Wednesday.

National departments were responsible for R2.286bn of that total, Makwetu told Parliament's Standing Committee on Public Accounts (Scopa).

Most of the irregular spending was not identified by the departments themselves but by the AG's office.

Provincial departments were guilty of a collective R16.2bn in irregular spending, while public entities contributed R2.5bn and legislatures R53m.

Makwetu said irregular expenditure often went hand in hand with flawed procurement, which in turn was often a case of state officials or close family securing tenders.

"If procurement and contract management is not complied with the chances are that expenditure is also not going to be complied with. It is very interesting to see the correlation between the two."

He said it was lamentable that those government departments that spent the lion share of state resources - education, health and public works - had failed to clean up their accounting act.

"There are no clean audits in that area where the bulk of expenditures are being incurred," Makwetu said.

"Since 70% of resources are going in this direction maybe the effort also needs to be directed at these areas where there are more and more problems from an accounting point of view.

"I think we must take a view that says where will the best benefit come from and I think it is if a limited amount of effort is given to those areas that have huge expenditures but problematic issues.

"It is not necessarily meant to say focus exclusively on these," he added.

Qualified audits

Health received a qualified audit for 2010/11 while basic education earned a financially unqualified audit with other findings and public works earned a disclaimer - one of the worst audit reports possible.

Auditor General Terence Nombembe said last week he could not find evidence to convince him of the correctness of public works' asset register.

On top of that, the department had irregular expenditure of R16.5m and failed to account for losses of R54m on a vehicle lease deal.

Makwetu highlighted procurement as a problem even for departments that had their books in order otherwise.

"They are doing their accounting properly but failing the test in terms of complying with the system of sourcing goods and services."

"In terms of non-compliance, 92 percent of national departments are in the red, meaning that they have not complied with whatever applicable laws and regulations they needed to comply with," Makwetu said.

Most "would easily migrate to the green" if they made an effort on compliance, notably with supply chain management rules.

Makwetu said Cabinet ministers were briefed on the AG's findings last week.

Other members of the AG's executive team said most departments had good guidelines but lacked dedicated staff who consistently checked on compliance.

They pointed to severe shortcomings in managing asset registers and singled out the land reform and defence departments for criticism in this regard.

Defence "has come a long way" but unfortunately left much of the task of sorting out its asset register woes to consultants who did not acquit themselves properly, Barry Wheeler said.

This put paid to Minister Lindiwe Sisulu's promise that a long spell of qualified audits would end summarily on her watch.

"They still have quite a lot of work to do to get their asset register up and running," Wheeler said.

Correctional services relied too heavily on consultants, who outnumbered the department's own accounting staff by ten to one, he said.

Scopa chairman Themba Godi said the auditor general's findings were disappointing because they reflected the same problems in state departments year after year.

"It is one step forward, two steps back. We would want to move forward all the time."

Comments
  • mundu.olewega - 2011-10-19 18:43

    Put the thieves in jail and this will stop. The AG needs to summarize a list of those who's dealings are inherently corrupt. Name & Shame.

  • Louis - 2011-10-19 18:47

    How will the country ever recover this money? R21 Billion! Isn't this exactly the proof that you cannot appoint someone in a job because of their skin color. How much more money have to be wasted before affirmative action will stop. This is as clear as daylight that the people in charge do not know what they are doing. They can't even look after their budget which any person with standard 8 should be able to do.

      Louis - 2011-10-19 19:03

      Just an interesting fact to show how much just ONE (1) BILLION is. If you have ONE MILLION RAND and you spend R10 000 (ten thousand rand) every day of your life, your 1 Million rand will only last you 3.3 months, yes just over three months. Now listen to this.. If you should spend R10 000 every day of your life and you have ONE BILLION RAND it will take you 277.7 YEARS!! to spend it all. Imagine how much money this incompetent government of us are wasting if they irregularly spend R21 Billion!!!

      StoneFlint - 2011-10-19 19:11

      Wow...that definitely puts a perspective on things.

      Igor Marinkovic - 2011-10-19 19:53

      To make it easier about 57.8 million rand was spent per day, if you take 365 day in a year. Or about 84.1 million rand per day if you take 252 working days

      Alva - 2011-10-19 20:44

      Mind blowing!

      Chronoman - 2011-10-20 08:41

      @Igor, spent yes, but spent irregularly, which can even mean it was lost.

  • marco - 2011-10-19 19:08

    The Washington Post newspaper: South Africa loses billions of dollars due to negligence and corruption by the ANC Government. "A South African government minister reportedly spends the equivalent of nearly $70,000 of taxpayer money on a trip to Switzerland to visit his girlfriend in jail who is facing drug charges,then tells his president that he was on official business.He claims to have been on sick leave since February.Another minister and the police chief were implicated in an unlawful deal to lease police buildings at inflated prices,which then cost taxpayers more than $250 million dollars. These incidents pale beside the sprawling,routine corruption and negligence in South African governance exposed by Willie Hofmeyr,head of an anti-corruption agency called the Special Investigating Unit.He told Parliament that around 20% of all government procurements,or about $3.8 billion,go missing each year-most of it stolen and the rest untraceable because of negligence.The South African government barely blinked since that report was made. Hofmeyr is currently investigating more than 900 cases of questionable contracts and conflicts of interest,valued at more than $635 million.The worst theft,he said,takes place at the local level,where there wasn't that much oversight. Recommendations were made to Zuma to act against corrupt ministers.And what is Zuma's response to all that?A presidential spokesman said that Zuma would respond to the recommendations when he is ready.

      Christelle - 2011-10-19 19:11

      This is unacceptable - and nobody is being held accountable!!! But we are kept being held accountable to pay our taxes - yet we have NO right to know how it is being spent. Julius, do you have any idea how many houses could have been build, how many jobs could have been created. But you want to trust these people to allow them to handle nationalised mines, banks etc. But my friend, walk your walk to get the people their "dignity" back. I want to throw up when I read articles like this. DEMOCRACY, WHEN WILL YOU MATURE ENOUGH TO VOTE FOR WHAT IS CORRECT, AND NOT FOR LOYALTY!!!!

  • Shivaskar - 2011-10-19 19:48

    What is even scarier is that the auditor's test on a sample basis and then extrapolate results over the population. The actual known irregularities would be much higher in my opinion if 100% was tested. How disrepectful to the people of the country. To the ones who voted them to power, you must learn from this!!!!!!!!!

  • Julio - 2011-10-19 19:57

    The sad thing about all this is that these same government officials will remain in power and will not be brought to book because they all have their fingers in the pie. And if they are replaced, a new batch of the same ilk will come into power and carry on just the same.

  • Muffdiver - 2011-10-19 20:21

    the continued ANC rape of our land hurts the poor most

  • Alva - 2011-10-19 20:50

    I am overwhelmed by the amount of irregular spending. To think that we have to pay for toll roads, people are left without basic services..the list goes on and on. It is just beyond comprehension that the country is so badly governed. This government has become South Africa's worst nightmare.

      Alva - 2011-10-19 20:53

      And this is the amount the AG knows about. What remains hidden?

  • MattQ4 - 2011-10-19 21:04

    Simple solution people - STOP PAYING TAX TO THESE CROOKS!!!

  • Wayne - 2011-10-19 21:24

    Forget about the Stop Wall Street protests. How about "Stop Paying Income Tax Until Corrupt/Inefficient/Incompetent Government Officials are Sacked Protests'?

  • Johan - 2011-10-19 21:34

    How about someone rich goes to court and disputes our obligation to pay tax to this insanely corrupt and immoral government?

  • ajbho - 2011-10-19 21:57

    There will always be corruption - but this number is mind boggling. Can you imagine how much better off this country would be if this money is put to proper use (education, health safety, transport). Politicians talk about nationalisation to return money to the poor - I think it's high time that the poor realise that it's actually these very same politicians that are stealing money from them! I am sick and tired about hearing of service delivery protests from the people who voted the same party in just a few months ago. Wake the freakin hell up people - your government is stealing YOUR money, YOUR houses, YOUR schools!

  • Pietpetoors - 2011-10-20 07:17

    How many houses is this? How many homeless people could be living in a real house if the lazy asses in Government stop stealing and wasting our money?

  • Chronoman - 2011-10-20 08:39

    So, guess what will happen to my money if whites get taxed according to Bishop Tutu's wishes?

  • pawsaw - 2011-10-20 11:13

    All countries should be run as a business by qualified professionals who have spent years specialising in a particular area after studying for the field they wish to enter. Security education and health should have a panel of qualified people. All these people should be totally a-political, hell appoint foreigners whose allegiance belongs to nobody. Those who wish to represent the country as the leader on a political platform should be allowed to do so but only for a year. They can be selected by their particular political affiliations however the final say should be based on a vote from the business people who are actually handling the running of the country because they have the necessary experience and qualifications to decide whether the person in that post deserves another term based on how well they fulfilled their role first among their own people and then on an international level. This would rule out historical factors in decision making regards where money is spent and ensure that only those with no personal convictions or other detritus be appointed to the position. A flat salary should be given to the person who applies regardless of his number of wives etc. This would eliminate the JM's and JZ's of the world feeding at the trough of taxpayers money and ensure that the monies disbursed are accounted for to the last cent by the incumbent and allow those impartial business experts to prioritise where the money would be best spent and is most urgently needed.

  • chester.wandsworth - 2011-10-20 11:36

    "In terms of non-compliance, 92 percent of national departments are in the red. In the private sector, they all would have been fired and replaced with competent people of any race. When I peruse news articles and comments on most issues in South Africa, I read a South Africa, that is in very serious trouble, the blatant maladministration, corruption in all forms, nepotism to the extreme, government that simply does not care about the people, fraudulent exposures, lack of accountability and punishment, serious criminal offences not adequately punished, repeat offenders getting parole and repeating the same crimes on someone else, uneducated leaders who cannot speak and inform us, the people, on almost any issue that we feel is in our national interest, spend millions of rand and energy creating an information gagging bill instead, hatred, millions unemployed, serious crime statistics, the list becomes endless. And all we do is to complain, when are we going to stand up for all our rights ?

      chester.wandsworth - 2011-10-20 11:57

      Chester, we certainly do have our challenges but also much going for us. We are a democracy where we can "stand up for all our rights" via the voting process. We suddenly have a viable alternative to the ruling party who is delivering and promoting leaders of all race and gender. Further our challenges, apart from crime, are not unique to SA and certainly are topical all over the world. However, our future looks far brighter than most countries and if we start the right conversations with the right attitude, hold government accountable through our votes, promote those doing great work, educate our nation and exert our energy in one direction then we will become the true rainbow nation.

  • chester.wandsworth - 2011-10-20 15:14

    "In terms of non-compliance, 92 percent of national departments are in the red. In the private sector, they all would have been fired and replaced with competent people of any race. When I peruse news articles and comments on most issues in South Africa, I read a South Africa, that is in very serious trouble, the blatant maladministration, corruption in all forms, nepotism to the extreme, government that simply does not care about the people, fraudulent exposures, lack of accountability and punishment, serious criminal offences not adequately punished, repeat offenders getting parole and repeating the same crimes on someone else, uneducated leaders who cannot speak and inform us, the people, on almost any issue that we feel is in our national interest, spend millions of rand and energy creating an information gagging bill instead, hatred, millions unemployed, serious crime statistics, the list becomes endless. And all we do is to complain, when are we going to stand up for all our rights ?

  • Faith - 2011-10-20 18:18

    ANC has wasted so much time& money and unfortunately have been succeding by playing the race card for far too long... Hulle moet uit skoert!

  • 100000662083211 - 2012-01-16 23:01

    How can they do their accounting properly if there is a irreguler spending of R21.1Bn, may they useing the corrupt law.How many homeless people could be living like white's or between white's.What are they doing to the guilty one's. Pat on the back.

  • paul.nothnagel - 2013-02-12 09:50

    How, in this great country, is it even possible that the public and the nation are standing for this? 92% of government cannot abide by the law. They are all stealing OUR money. Why are the poor so powerless against the fat cats? Why do we all stand by idly while they rob us blind to satisfy their unjustifiable greed? They will never stop. It is in their nature to take what is not theirs. Soon enough the government will bleed the public dry. Look at all the different ways 'Government' is taking your money. If they keep wasting BILLIONS (R????000000000. 00) of OUR hard earned money [actually hundreds and thousands of Billions], we will all go down. Air Passenger Tax Capital Gains Tax (CGT) Corporate Income Tax (CIT) Diamond Export Levy Dividends Tax Donations Tax Estate Duty Excise Duties and Levies Income Tax Mineral and Petroleum Resource Royalty Pay As You Earn (PAYE) Provisional Tax Retirement Funds Tax Secondary Tax on Companies (STC) Securities Transfer Tax (STT) Skills Development Levy (SDL) Stamp Duty Transfer Duty Turnover Tax Uncertificated Securities Tax Unemployment Insurance Fund (UIF) Value Added Tax (VAT) At the end of the day 40% - 60% of what you earn goes to these people. Most of who probably don't even have Matric. Wouldn't you also like a fancy new black Mercedes ML? Well maybe if you didn't have to waste your money on tax you could. Taxes paid by the people, for the people. Not for individuals to get whatever they desire!

  • Willie Mostert - 2013-03-12 14:56

    Nothing will come of this - nobody in government will be accountable. So next year you will see the same weak audit. The question to be answered is - why even try reporting on it?

  • Charlton Smith - 2013-03-12 16:23

    I've read everyone's opinion and although I too am outraged by the revelation the AG was kind enough to share, THIS WILL NEVER CHANGE... at least not until information like this is made available to the POOR. Action Time: There needs to be a campaign launched to educate the poor and blindly following ANC members about all the facts about their beloved organization. Only when the masses are made aware, then only can we hope to save our beloved country. Everyone on these posts are 'so-called' privileged people (in the sense that we have access to the information). So, CALLING ON A BRAVE AND COMMITTED SOUTH AFRICAN, with no official political ties, to use your hard-earned wealth and let us FIGHT CORRUPTION (i.e. the ANC) with a KNOWLEDGE AND AWARENESS CAMPAIGN. We have enough statistics to change the most loyal of ANC members. 21.1 BILLION could have contributed to South Africa having the best EDUCATION infrastructure (buildings and labs only) in the world...

  • Mark Neil Wade - 2014-07-11 12:32

    thanks Jacob , we surely have a good story to tell

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