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Auditor General Kimi Makwetu has found that the National Economic Development and Labour Council did not do enough to prevent or correct R11m in irregular expenditure reflected in the institution's 2018-19 annual report.
Nedlac is a platform for business, unions, and the government to meet and co-operate on issue related to labour and the economy.
While Nedlac did improve from a qualified opinion in 2018 to an unqualified audit opinion in 2019, the organisation has, by its own admission in its report, faced a number of challenges.
Irregular expenditure at Nedlac went up from R1.4m in 2018 to R11.5m in 2019. The irregular expenditure reflected from 2018 is the subject of a disciplinary inquiry.
The audit report assesses if the financial statements align with the financial state of the audited entity; therefore the office of the Auditor General considers this year's set of financial statements a more accurate reflection than last year's ones.
Makwetu said that failure to prevent the irregular expenditure which occurred in 2019 flew in the face of the Public Finance Management Act.
"Effective and appropriate steps were not taken to prevent irregular expenditure amounting to R11 585 231 in the annual financial statements, as required by… the PFMA," the audit report said.
Makwetu said in his audit report, included in Nedlac's annual report, that he was unable to obtain sufficient appropriate audit evidence that disciplinary steps were taken against officials who had incurred fruitless and wasteful expenditure.
"This was because proper and complete records were not maintained as evidence to support investigations into fruitless and wasteful expenditure," Makwetu said.
He said there was inadequate oversight responsibility over compliance with laws and regulations. This resulted in repeat findings on procurement and consequence management. Management did not adequately review and monitor compliance with applicable laws and regulations, he said.
In its annual report, Nedlac convenor for business Kaizer Moyane said the organisation overcame challenges, including the absence of key leadership personnel.
"It was also a year that followed a qualified audit opinion from the Auditor-General, which was mostly due to irregular expenditure.
"Given the flurry of activities, some of which were not part of the approved programme for the year, the secretariat would have been justifed to worry about the possibility of yet another negative audit. However, credit goes to them for achieving an unqualifed audit for the year under review," Moyane said.
