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Public Works can't account for R2.1bn

Oct 03 2011 16:06
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Cape Town - The department of public works (DPW) is not able to account for more than R2.1bn worth of goods, services and capital expenditure during the 2010/11 financial year, the auditor general said on Monday.

In the DPW's latest annual report tabled in parliament, the auditor general's report on the department's financial statements said that he was unable to satisfy himself as to the occurrence, accuracy and compliance of goods and services amounting to R819.046m  and expenditure for capital assets stated at R1.340bn.

The auditor general also said that he could not obtain sufficient evidence as to the obligation, valuation and classification of the operating lease commitments of R115m.

He also pointed out that irregular and wasteful expenditure of more than R16m understated wasteful expenditure.

The DPW received an appropriation of R7.365bn for the 2010/11 financial year compared with R6.049bn for the year before. In the last financial year it managed to spend 90% of its budget compared with 94% the year before.

In her foreword, Public Works Minister Gwen Mahlangu-Nkabinde made no mention of the debacle surrounding the lease of two SA Police Service buildings in Pretoria and Durban amounting to almost R2bn.

Public Protector Thuli Madonsela found in her investigation of the leases that Mahlangu-Nkabinde had committed maladministration in authorising the leases at rates far above their market value.

Mahlangu-Nkabinde has since taken court action to have the leases declared void.

The auditor general's report also pointed out that the DPW had materially underspent the budget on the immovable asset management programme to the amount of R235m, and the expanded public works programme (EPWP) to the amount of R500m.

"In terms of the EPWP, the bulk of the under-expenditure was due to the infrastructure grant to provinces and municipalities not being transferred due to the under-reporting and poor performance by the reporting bodies eligible for the incentive grant," the auditor general said.

The EPWP is government's main job creation project to help as many unemployed people as possible to find paid work in building roads, schools and other public works.

He said that as a consequence, the department did not achieve its objectives of fast-tracking the construction of selected schools and energy-efficient intervention.

The auditor general also slammed the usefulness of the information supplied for auditing purposes in terms of consistency and measurability.

The auditor general attacked the leadership within the department, accusing the accounting officer (the director general, Mandla Mabuza) for not exercising oversight responsibility regarding financial performance and procedures to enable and support the understanding and execution of internal objectives, processes and responsibilities.


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