State departments spend R102bn on consultants

2013-01-24 14:57

The Auditor-General has implored government to immediately implement stricter financial controls to curb expenditure on consultants, which amounts to R102 billion in three years.

This was revealed by Deputy Auditor-General Kimi Makwetu in Pretoria today.

One of the most bizarre examples of the irregular use of consultants was where government departments spent millions of rands to employ recruitment agencies to fill vacant posts despite having their own human resources units.

The Auditor-General report, which is based on an audit of the performance of eight of the 44 national departments, has identified areas which, Makwetu said, needed urgent control and attention when engaging the services of consultants.

He said the use of consultants was also open to abuse as government departments could not provide documentary proof of the decision taken to enter into 63 consulting contracts worth R1.9 billion.

Only 124 contracts, amounting to R24.6 billion, were audited.

Of the eight audited departments, the department of defence spent the highest amount: R10.4 billion in the past three years.

The expenditure for the other departments is:

» Departments of police and water affairs: more than R4 billion each

» Correctional services: R2 billion

» Transport: R1.8 billion

» Rural development and land reform: R1 billion

» Environmental affairs: R550 million

» Health: R416 million

Despite the guidelines and regulations issued by National Treasury and the department of public service and administration, many weaknesses in the overall management and use of consultants by government persist, said Makwetu.

According to the report, national government departments spent R33.5 billion on consultants between 2009 and 2011, compared with R68.5 billion by provincial departments during the same period.

Government agencies, entities – including sector education and training authorities – and municipalities were not audited for their use of consultants, which means that the total expenditure on consultants is in fact higher than the R102 billion.

The report identified the growing skills crisis and a lack of internal financial controls as some of the reasons government was not getting value for money, particularly the lack of skills transfer to public servants from consultants.

“The inadequate planning, high turnover of employees in key positions, inadequate financial and performance management, and ineffective governance arrangements adversely affected the economical, effective and efficient use of consultants,” said Makwetu, adding that government could turn the corner on the overexpenditure on consultants by implementing the right controls and systems.

“The recurrence of findings that were highlighted in our previous performance audits on consultants and continuously in our annual audits is a cause for concern, particularly in light of the R102 billion spent on consultants,” said Makwetu.

He said interventions recommended by the Auditor-General to government had not yielded results.

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