FS finances look grim

2017-11-08 06:01

The latest report by the auditor-general (AG), Kimi Makwetu, paints a gloomy picture about the Free State government’s inability to manage finances. Makwetu announced national and provincial audit results on Wednesday (01/11). The results showed an improvement, albeit at a very slow rate, by some provinces in the past four years (2013-’14 to 2016-’17).

The Free State government, however, remains trapped in a vicious cycle of dismal accountability for finances despite repeated efforts to tighten the belt. Following ongoing erratic findings in the Free State and North West, Makwetu has singled out a lack of accountability and commitment towards clean administration by the leadership. He added that these factors influenced the poor results of the two provinces. Makwetu has categorised the Free State as a high-risk environment when it comes to supply chain management.

“While the overall audit outcomes showed a noticeable improvement, progress was hampered by factors such as poor compliance with laws and regulations, especially in the areas of supply chain management, inappropriate monitoring of key project deliverables and an inability to manage the finances of departments and entities properly,” says Ma­kwetu.

Due to leadership’s inability to deal with finances, he says the Free State poses a serious threat to the financial health of its departments and entities, with potential negative impacts on the delivery of key projects.

Reacting to the findings by the AG, David van Vuuren, the DA’s chief whip in the Provincial Legislature, said irregular expenditure totalled almost R6,4 billion, of which the departments only reported R5,4 billion in their financial statements.

“Most concerning is that the office of Premier Ace Magashule and the Department of Agriculture and Rural Development jointly failed to disclose irregular expenditure of R974 million – talk about cooking the books. The main culprits responsible for this massive amount of money irregularly spent is the Department of Health with R3,5 billion, the Department of Human Settlements with R1,015 billion and the Department of Education with R680 million. But hope remains. Where the DA governs in the Western Cape, with 21 completely clean audits, our government is advancing quality basic service delivery, attracting investment, creating jobs, and substantially improving the lives of all the people of the province,” he said.

Tshidiso Mokokoane, spokesperson of the provincial treasury, says investigations into irregular expenditure dating back as far as 2007 are underway. The accumulated irregular expenditure for the Free State departments on 31 March was R9,2 billion.

“The initiative started with the Departments of Education, Health and Human Settlements. The process involved the verification of 20 000 payment documents for the 2010-’11 to 2015-’16 financial years for Health, as well as the investigations of 7 474 irregular expenditure cases for the three departments. The process followed requires time and effort to clear irregular expenditure.”

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