The land of plenty

2014-11-30 05:00

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Government departments’ irregular expenditure doubled to R62?billion in the past financial year – and, says Auditor-General Kimi Makwetu, crooked officials are becoming more daring because they don’t fear any punishment.

Makwetu blames elected politicians and heads of department whom, he says, often don’t follow through with disciplinary action even when financial misconduct has been confirmed.

“Let’s put it this way: in the absence of consequences, government money becomes low-hanging fruit,” Makwetu told City Press in an interview on Friday.

This week Makwetu unveiled his team’s 2013/14 audit report of government’s 469 provincial and national departments, and their entities.

“Many people are attracted to the prospect of laying their hands on government finances and, if there are rules set that are not being observed, the chances are that the temptation to do all manner of things with that money will always be high,” said Makwetu.

Not only are government leaders failing to discipline employees, but they are slow to recoup money owed to the public purse by officials.

In the past financial year, just R15?billion of the R54?billion lost to financial misconduct was successfully recouped, as set out in the Public Finance Management Act, he said.

Departments also spent an eye-watering R12.1?billion on consultants to fill government’s extensive skills gaps – even though last year Treasury vowed it would curb the use of them.

The R12.1?billion was spent on:

»?Financial reporting services (R386?million);

»?Preparation of performance information (R23.9?million);

»?Information technology services (R1?billion); and

»?The majority of the money was spent on other unspecified services, including lawyers and advisers (R10.7?billion).

Makwetu said officials should be held accountable when they have hired consultants who don’t add any value to their department.

“The way it happens now is that officials are on the back foot. People are engaging the service provider [like a contractor] and they don’t do it in terms of the prescribed processes. And they end up paying a fortune because they can’t even control what that service provider must do,” he said.

“So it becomes an expensive option because it is not properly controlled and the reason – among others – is that there are no consequences for dealing with someone who doesn’t bring value.”

The use of consultants was more prevalent in national departments, with 21% of them engaging the services of auditors. Eight departments in the Eastern Cape, four in the Free State, and five in both KwaZulu-Natal and the Northern Cape also used them extensively.

The report also shows that departments wasted R800?million trying to deal with the previous year’s wasteful expenditure of R800?million.

“This is a result largely of the inefficient execution of government work,” he said.

People were inept in carrying out government work, he said.

“Why do I say this? If I have a department that is responsible for paying our suppliers, and it is late with payment, we incur penalties. In other instances, departments have to rebuild buildings [constructed] by shoddy contractors.”

Makwetu said it was time heads of department and political principals stopped blaming lack of skills for government’s poor performance.

“The overriding issue and the most critical part of it is to ensure that leadership in the institutions sets the tone, both in clarifying the rules and in demonstrating in action that when someone does something of a similar nature, they can demonstrate that there’s action that they take,” said Makwetu.

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