Department fails military veterans

2015-03-08 15:00

For the first time since 1994, Parliament’s finance watchdog, the standing committee on public accounts (Scopa), had to cancel hearings on the annual report and financial statements of a government department.

This week, it cancelled the hearings dealing with the 2013/14 financial year of the military veterans’ department due to the department’s lack of financial systems and controls. It received a disclaimer, because the office of the Auditor-General (AG) could not form an opinion; it did not have enough evidence to confirm the department’s opening balances and the correctness of its closing balances.

Although the veterans’ department started operating independently in April 2013, it had earlier been part of the department of defence. It should by now have financial systems and processes to deliver proper services to South Africans.

But its noncompliance with the laws and regulations relating to procurement and other aspects of compliance resulted in 25% of the department’s expenditure being deemed irregular.

Scopa was told the absence of leadership and guidance in the department’s financial environment – coupled with the fact that the duties of its chief financial officer were performed by junior staff members from various sections of the department – contributed to the disclaimer.

The department told Scopa that its senior management was placed on special leave by Minister of Defence and Military Veterans Nosiviwe Mapisa-Nqakula after the findings of an internal audit probing the irregular expenditure and noncompliance.

Scopa believes there was a separate independent forensic investigation by the minister and will ask her for this report, to assist where it can in rectifying the department’s challenges.

It became clear that key personnel required for a successful audit process were absent at a critical period in the department.

Scopa has also noted the concerns of National Treasury regarding the department’s spending patterns. The fact that it has not responded to any of Treasury’s monthly and quarterly report requests shows a serious financial-management breach.

Treasury has also told Scopa it has a problem with the department not paying the benefits it should with its budget allocation. The department spent 47% of its budget in the 2013/14 financial year. By January this year, it had only spent 38% of its allocated budget.

This is notwithstanding Treasury helping it with regulations and greatly increasing budget allocations. Since 2009, no pensions have been paid and no houses built. Scopa and Treasury believe the portfolio committee on defence and military veterans should look into these issues.

Judging by the AG’s feedback, Scopa feels the department needs a clear action plan before the end of the current financial year.

It should also address the questions around its opening and closing balances, as well as other matters mentioned in the report.

Scopa has learnt from the AG that he does not believe a proper delivery of the department’s mandate is taking place owing to its current situation.

Scopa has no doubts about the importance of the department – it is a crucial entity that should exist and have its own budget. Therefore, we will ask the portfolio committee to invite Scopa to the military veterans’ department’s presentation of its strategic plan and annual performance plan. This is so that we can participate and influence the quantity of the budget it will receive based on whether it has the right systems in place and the necessary staff complement to perform its required services.

The state cannot put money into a department that appears to have neither of these prerequisites in place.

It will be irresponsible of Parliament to allocate a budget to a department that cannot assure South Africans it will be a reliable custodian of their money.

Godi is chairperson of Parliament’s standing committee on public accounts

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