AG: Nkandla is but a drop

2013-11-17 10:00

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Auditor-General says we should use the scandal at the president’s homestead as a starting point to look into the R28.7bn the state has blown.

Outgoing Auditor-General Terence Nombembe understands that Nkandla is big news, but wishes a similar spotlight would shine on all R28.7 billion in irregular and unauthorised expenditure racked up by the national and provincial governments.

“For every irregular expenditure, there must be due process that is followed to clear it?...?For me, it is just unfortunate that there is a spotlight on one tiny element of R206 million [President Jacob Zuma’s Nkandla residence] of the R20?billion plus. Each one of those expenditures requires a different approach to clear it,” Nombembe said.

Nombembe this week released his office’s audits for the financial year to March 2013.

In addition to the R28.7?billion, half of the government departments and entities audited incurred more than R2.1 billion in fruitless and wasteful expenditure.

A tally of the figures shows that provinces account for more than R22.9 billion of the total amount of money being wasted, which is an increase of R2.4?billion from last year.

Gauteng is the biggest culprit and its department of health is to blame for the contracts that resulted in the bulk of the R6.7?billion in irregular expenditure recorded in the province.

By contrast, the Western Cape recorded the lowest wastage, at R212 million.

Nombembe says unauthorised expenditure should not be seen as a waste of public funds “unless it is done with an element of malice”.

“It simply means people have made decisions to appoint service providers without following the A-Z of checking and adhering to the prescripts.

“Unauthorised expenditure is not wastage. It simply means that you spent money that was not budgeted for.

“That has one simple risk of having your financial stability compromised. Now that you have overspent, where will you get other funds to replace that which you have spent over the budgeted limit?” he says.

Finance Minister Pravin Gordhan has recently come out strongly about the need to cut wastage and frills in government.

Nombembe says it’s important for discipline to be instilled among employees so they don’t flout the country’s finance laws when handling budgets.

He’s upbeat about several initiatives. He believes the new school of governance for civil servants will go a long way to introducing the culture that’s needed in the public service.

And the laws Public Service and Administration Minister Lindiwe Sisulu is introducing will help clamp down on wastage – the current Public Finance Management Act has loopholes regarding what should be done to culprits, he says.

There is a need to pick up financial irregularities as they happen, rather than to wait until the audit stage when it is too late to curb it, he says.

“It is a matter of the legislation being too loose. The offender has got the upper hand over government because the legislation is not watertight enough to hold people accountable,” he says.

The departments of social development, monitoring and evaluation, and the Public Service Commission are the only national departments that received clean audits.

Public works, defence and water affairs are among the worst performers – they all got qualified audits.

Among provincial departments, Limpopo leads the losers, with disclaimers in three departments: public works, health and education.

Nombembe says the intervention by the national government has helped bring financial stability to Limpopo, but the province still suffers from a shortage of skilled people in finance and administration.

“The reason we have disclaimers in three departments is because the systems of accountability have not risen up to the level of excellence,” he says.

What provinces misspent

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