Sisulu wants exemptions for military

2012-05-15 20:09

Cape Town - Defence Minister Lindiwe Sisulu has called for allowances to be made for the military under the Public Finance Management Act (PMFA) to help it achieve audit compliance.

Briefing MPs on the defence department's audits on Tuesday, she said certain PMFA reporting rules were too onerous for the military because of its special operating conditions.

Sisulu singled out Treasury requirements that applied to tenders over R500 000, suggesting the threshold was too low when it came to defence contracts.

She said the ministry felt constrained by the requirement to investigate allegations of financial misconduct within 30 days of their discovery, given that it also operated outside the country's borders.

"We don't want to be outside the PMFA. We want to comply, but certain areas of the PMFA did not take into account the uniqueness of defence."

The defence department has accrued irregular expenditure of R799 349m in recent years, mainly from failing to comply with the Treasury's procurement rules.

The finding related to late lease payments, the now-cancelled A400 Airbus contract and a failure to institute a competitive bidding process to proper procure goods and services worth more than half a million rands.

"Airbus is still dogging us. It comes up again and again though we have cancelled," Sisulu said.

Defence Secretary Sam Gulube said the department had investigated more than 120 of the 129 cases of irregular expenditure reported. An amount of R275m was still not accounted for.

He said the process should be completed by the end of the year.

The department also needed to resolve 24 cases of fruitless expenditure amounting to a loss of R10m.

The minister said the department was introducing a compliance strategy on expenditure and instructing staff to follow rules.

The defence department improved its audit results from 16 qualifications in 2007/2008 to a single one two years later.

The remaining problem was a wholesale failure to maintain a proper asset register and disclose financial information regarding assets.

Last year, it again received one qualification on the same count. It now had a register that was not adequate.

Sisulu said the auditor general had acknowledged that the department had made significant progress in dealing with the problem.

"There is that lingering problem and it is still about the tangible and intangible assets," she said.

"Defence is such a difficult institution to adhere to these standards because of its uniqueness.

"We have tried in vain to get an exemption. I have been on my knees to the accountant general, the auditor general and the [finance] minister himself and they have all said 'no'."

Sisulu conceded that a number of senior defence managers had failed to enter into performance agreements in the current financial year.


Read more on:    lindiwe sisulu  |  government spending  |  military

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