House Chairperson, comrades and hon members, the reports that we are presenting are in two forms. The first two are about unauthorised expenditure, and the other two are about the hearings that we have had.
Regarding the Department of Defence and Military Veterans, there are four items that constituted the unauthorised expenditure that the department incurred in previous financial years. The first one is on the military museum where an amount of about R15,1 million was incurred. Since the Defence Act of 2002 was enacted, which provides that the military museum be the function of the department, the committee recommends that this R15 million should be approved by Parliament as a direct charge against the National Revenue Fund.
There is also an amount of R40,2 million which is an overspend owing to the peace-support operations that the department had to undertake. As a committee, we feel that Parliament should approve this, and also as a direct charge against the national revenue fund. The remaining two, which are the hiring of photocopiers in the amount of R5,4 million and the repair of furniture in the amount of R17 000, the committee recommends approval, but that it should be funded from savings from the department.
The second one is the Department of Correctional Services, which has total unauthorised expenditure of R483,8 million which was incurred in the 2008- 09 financial year. This was because the department had to implement the Public Service Co-ordinating Bargaining Council resolution which was that employees should be compensated for overtime in monetary terms, and thus the department incurred an overexpenditure of R1,2 billion for overtime. After the additional money that they got from National Treasury, they were left with unauthorised expenditure of R483 million. The committee recommends that this amount should be approved, but that the department should use savings to fund this unauthorised expenditure. Fortunately, we already have a letter from National Treasury and the department indicating that they will be able to make savings in this financial year that should cater for this unauthorised expenditure.
The second category is that of hearings of the Department of Social Development and the SA Social Security Agency, Sassa. We had a hearing with the department and the entity on 14 June 2011. We must indicate, however, that in so far as the department is concerned, the department had an unqualified audit, but because of the accountability relationship between the department and Sassa, it was decided that the audit opinion of Sassa had a direct bearing on the audit opinion of the department. So, all the findings that we are talking about of the department, in large measure actually arose out of the findings on the entity itself. We recommend that co-operate governance, and particularly the accountability relationship between the department and Sassa, needs to be addressed urgently.
In the meantime, the department needs to ensure that its in-year monitoring of Sassa's management of funds is beefed up so that it does not have a hands-off approach, and, yet at the end of the financial year, the outcomes of the audit opinion of Sassa impact directly on the department. On the agency itself regarding the issue around supporting documents for social grant beneficiaries, the expenditure of more than R10,5 billion could not be verified because we do not have all the documentation in place.
The agency moved to a new accounting system, the accrual-based accounting system, without training its staff and that is why it received a disclaimer from the Auditor-General. Beneficiaries were paid without all the supporting documents, and there were numerous numerical errors in the financial report of the agency.
We recommend, amongst other things, that controls over the safeguarding of source documentation are put in place, because if the Auditor-General cannot find the source documents, it becomes difficult to confirm whether, indeed, people who were receiving child grants deserved them.
If you go to their offices - in terms of how the processes are conceptualised - they are perfect, but the implementation is where the problem lies. And this is more a management and monitoring control challenge. The internal controls, as far as finance are concerned, need to be developed and implemented effectively, and there is the need for training of Sassa staff on the accrual-based accounting system.
These are the reports that we are presenting, and I want to thank my colleagues in the committee with whom we have worked so hard and collegially in dealing with all matters that are brought before us. I also want to thank our researchers and the committee secretaries who ensure that the committee sustains the reputation that it has for seeking accountability in respect of public funds. Thank you.
There was no debate.