Stats and figures: Auditor General report on department’s irregular and wasteful expenditure

On Wednesday 5 February, the new Auditor-General (AG) Mr Kimi Makwetu briefed the Standing Committee on Public Accounts (SCOPA) on the audit outcomes of national departments for 2012-13 (released in November 2013) unauthorised, irregular, fruitless and wasteful expenditure. The good news is that there are improvements, but the findings have shown that the process is a slow one. Hopefully the new AG will crack the whip a little harder this year so that government is encouraged to get cleaner audits.

The amount of fruitless and wasteful expenditure has come down across the board, but the Departments of Justice and Constitutional Development, and Rural Development and Land Reform’s audit shows they have wasted R39.2 million and R35.7 million of their budgets, respectively. The departments with the highest irregular expenditure last year saw Cooperative Governance & Traditional Affairs coming out tops - with R418.4 million identified during the audit and a further R80.9 million identified by auditors – followed by Public Works, Correctional Services, Transport and then Defence.

Of the audit outcomes for South Africa’s 40 national government departments the AG’s office found that six had improved, 30 remained unchanged and four had regressed. With regards to unauthorised expenditure, Home Affairs had over spent R301 million last year and Public Works spent R166 million that was "not in accordance with their purpose". Overall however unauthorised expenditure has dropped from R861 million in 2010/11 to R467 million in 2012/13 and this should be commended.

After the presentation, ANC MP Roy Ainslie raised the valid point that failure to prosecute those who breach the law is a major driver of unauthorised and wasteful spending.

Of the hefty R2.4 billion overall irregular expenditure figure, Makwetu told the committee that a large chunk of it related to supply chain management. The other risk areas he drew attention to were the quality of submitted financial statements (73% with material findings and 28% with no findings). The report also made mention that in 25% of cases, intervention is required with regards to the department’s review and monitor compliance.

As a Chapter 9 institution, the Auditor-General has a constitutionally mandated oversight role to ensure government is held accountability with regards to the public purse and how our taxpayers’ money is being spent.