Auditor General Tsakani Maluleke; (GCIS)
The disregard for the “rule of law” highlighted by Auditor-General Tsakani Maluleke has resulted in over-spending of over R38.8 billion by government departments and public bodies.
Ms Maluleke on Tuesday issued a stern warning to state officials who failed to submit financial reports on time in what she called a “culture of tolerance”, saying the government had lost more than R14.3 in the past five years. It added that it had suffered a loss. Billions of dollars are lost due to payments for goods not received and inefficient use of resources.
In a presentation to parliamentary portfolio committee chairs led by House of Representatives Chairman Cedric Florrick, the Auditor General detailed the outcomes of the Financial Management Act (PFMA) for Government Departments and State Entities for the 2023-24 fiscal year.
Tracking irregular spending, the country has spent more than R49.5 billion in the current financial year, up from nearly R27.4 billion in the previous reporting period and significantly higher than R13.65 billion in 2019-20. He said that. .
Mr Maluleke said the sudden increase in fraudulent expenditures was due to lazy and misguided accountants and department heads who did not investigate, promptly act on or recover the fraudulent expenditures, which were carried over to the following year. He said this was due to the swelling.
“What it tells us is the tenacity of this irregular material.” [expenditure] The balance is that there is a pervasive culture of tolerance for non-compliance,” she said, adding that accountability measures must be taken against faulty officials.
“The important thing is that once a problem is identified, we have to act quickly to change the culture, and people know that we will take action if there are violations.”
From 1 April 2019, the Audit Act amended by Parliament gives the Auditor-General more powers to deal with incorrect financial reporting and responsible officials. The process was led by then Auditor General Kimi Makwetu, who wanted the government agency under Chapter IX to do more in its dealings with state officials.
Mr Maluleke said on Tuesday that his office had introduced new powers over the past five years, but stressed there were still limitations.
“The power does not provide for us to put anyone in prison. This power also does not provide for us to discipline anyone. This power does not provide for us to put anyone in prison. “It's a complementary mechanism to follow up on how people are being treated,” she explained.
However, Mr Maluleke said that the revised auditing law would allow organizations to commit “serious misconduct”, i.e. paying for goods and services not received, unfair, uneconomic and anti-competitive procurement, and receiving financial aid that was not received. It is now possible to track value, unprotected national assets, etc. Among many other issues.
The Auditor-General said his office was able to recover wasted and lost funds by tracking serious irregularities that resulted in losses of more than R14.3 billion in 2019-2020.
“Of that R14.3-billion, we were able to recover just over R3-billion to our treasurers and this is just for the last five-year PFMA cycle,” she said.
“Yes, we can celebrate that we have protected R3.39 billion in resources,” she added, acknowledging that there was a big difference between R14.3 billion and R3.39 billion.
“And the gap between these two numbers is the actions of treasurers. Treasurers need to make sure they prevent these problems and detect and address them faster.”
Mr Maluleke told the oversight committee chairs that the country's low economic growth rate – expected to average just 1.8% over the next three years, according to Finance Minister Enoch Godongwana – was putting pressure on the government. He urged them to step up efforts to hold state officials accountable. Ficus of the country.
“It will be critical that we withdraw our tolerance of inappropriate payment practices,” she said.
She gave the example of the energy and water public sector, where R700 million was paid to service providers for training that was “not provided”. She added that work is underway to recover the lost funds after her office raised the issue.
The Unemployment Insurance Fund and the Compensation Fund had not complied with the timely submission of financial statements for several years.
Mr Maluleke said the compensation fund had received disclaimers in audit opinions for the past 12 years, the worst results recorded by the firm, as it manages a large budget with employer contributions. He said he was concerned.
“R11 billion passed through the compensation fund last year and the issue is getting the compensation fund to respond appropriately in terms of accountability, transparency, oversight and moving the compensation fund out of this area where it is appropriate. ” Is governance clearly being ignored? ”
An audit report submitted to parliament cited problems with procurement and supply chain management processes, and the group said the “quality of financial statements submitted” regarding state purchases remained poor.
“The majority of compliance findings relate to the management of procurement, the process of deploying public resources through the acquisition of services and goods, and ensuring that those processes comply with procurement regulations. ”, the report states.
Mr. Maluleke elaborated: “What we see is a lack of due diligence and attitude to insist on adherence to the rule of law.”
He added that “too many” national and local government departments ended up overpaying for goods and services that were typically of “low quality.”
This resulted in a budget overrun of more than R38.8 billion, consisting of nearly R35.3 billion in fraudulent expenditures and more than R3.5 billion in fraudulent expenditures by public bodies.
