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Irregular expenditure by govt departments and state entities accumulate to R72.6bn - report

Oct 07 2018 12:12
Lameez Omarjee, Fin24

Irregular expenditure by government departments and state entities have accumulated to R72.6bn, according to an analysis by the DA.

The main opposition party on Sunday held a briefing on the 2017/18 annual reports tabled by government departments and some state-owned enterprises (SOEs) so far.

The report showed that total irregular expenditure - spend incurred which is not in accordance with the Public Finance Management Act - increased 70% from R42.8bn recorded last year.

Not all government departments and SOEs have tabled their reports and amounts could be greater, DA MP Natasha Mazzone said at the briefing.

The DA also issued a list of the entities and departments responsible for most of the irregular expenditure. Eskom tops the list with R19.6bn, followed by Sanral at R10.5bn and Transnet at R8.1bn.

DA MP John Steenhuisen added that the bailouts to SOEs have and essentially led to the VAT hike introduced earlier this year.

Mazzone commented that SOEs cannot continue the course on which they have been.

“SOEs are going from one bailout to the next, one disaster to the next. It’s got to a point where it doesn’t matter who you put in the boards because the entities are so broken, it is almost impossible to fix,” she said.

The work of the portfolio committee on public enterprises through the Eskom inquiry showed that SOEs were used as catalysts for state capture, through the deployment of certain individuals on boards, she added.

Since being appointed as public enterprise minister February Pravin Gordhan announced sweeping changes to boards of SOEs with the mandate of rooting out corruption, stabilising the entities and to chart a way forward for their future sustainability.

At a briefing to the public enterprises committee in August, Gordhan said that cleaning up past corruption at SOEs won’t be easy. 

This past week it the department announced that the Director-General Richard Seleke would leave the public service. He had been implicated in the leaked Gupta emails as having leaked information to the Guptas about deals with SOEs.

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