Irregular spending on Nkandla done behind A-G’s back

2014-11-27 00:00

CAPE TOWN — Evidence of large scale unauthorised and irregular spending on the Nkandla project was hidden from the auditor-general (A-G).

That was why the A-G did not spot any irregularities in the three years ­during which R246 million was spent on improving President Jacob Zuma’s private estate at Nkandla.

This was the answer auditor-general Kimi Makwetu yesterday gave ­Parliament when MPs asked why his ­department never raised the alarm about Nkandla. Makwetu was speaking during the tabling of the PFMA 2013/14 report on national and provincial audit ­outcomes.

He said the audit reports of Public Works show the A-G stated it could not form an audit opinion because the department did not present the necessary documents. He said the audit was further complicated because some of the documents provided were classified.

Public Works only decided earlier this year to act against the officials who were involved in the project after the public protector and Special Investigations Unit found many rules and regulations had been flouted and the department had overspent by R155,3 million.

The A-G’s records show the national Department of Public Works also ­received an audit disclaimer.

Speaking about the 2013/14 report, which includes 165 departments and 304 public entities, with a total budgeted expenditure of R1,035 trillion, Makwetu said clean audits have come down from 75 in the last fiscal year to 53.

Just over half (51%) of the departments and entities received an “unqualified with findings” audit outcome, while 16% were “qualified with findings”, four percent received an “adverse or ­disclaimer” audit, while a further four percent did not submit on time.

The report warns that while reporting on performance is improving, South Africa’s main service delivery sectors are lagging behind. Almost a third of the departments did not have the relevant documents available.

Economist Mike Schussler said the A-G’s admission that Public Works could easily hide massive unauthorised and irregular spending was worrying.

“If they [the A-G] did not pick it up, it may mean there are many other such cases that they are also not picking up.

“This tells me our institutions may not be as good as they are portrayed. It also means the A-G is not infallible.”

Makwetu told Parliament cases where officials ignore financial legislation and tender regulations were ­“extremely widespread”.

Parliamentary committee chairperson ­Cedric Frolick said improved ­control measures have to be put in place to catch “serial offenders”.

He said officials have fallen into a ­habit of simply ignoring all the rules and regulations and only trying to fix things so the A-G will not find irregularities.

Frolick warned this habit will destroy certain departments and “will have a negative impact on SA as a whole”.

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