11% of government departments may not be able to operate in future - AG

2017-10-17 17:47
Auditor General Kimi Makwetu (File, Netwerk24)

Auditor General Kimi Makwetu (File, Netwerk24)

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Cape Town – Auditor General Kimi Makwetu has revealed in Parliament that 11% of government departments face "material uncertainty" about their ability to continue operating in future.

Makwetu was reporting before the Standing Committee on Public Accounts (Scopa), the Standing Committee on Appropriations, and the Standing Committee on the AG on Tuesday about the 2016/17 audit outcomes.

The 11% figure was double the amount of departments from the previous year's audit outcomes, he told MPs.

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"Included are 12 of the 13 departments in the Free State, the department of water and sanitation and three health departments," he said, those being for the Eastern Cape, Free State and Northern Cape.

Twenty-eight (17% of) departments had to use more than 10% of their allocated budgets to make up for the previous year's shortfall.

Fifty-six departments (34%) had a deficit if accruals were taken into account.

Sixty-four departments (39%) have missed the 30-day deadline to pay their creditors.

Irregular expenditure

For unauthorised expenditure, 12% of government departments had unauthorised expenditure of R1.4bn combined. The Free State was the worst province, with 22% of its departments recording unauthorised expenditure.

For irregular expenditure, 67% of departments (265) combined had R45bn in irregular spend, compared with R29bn from the previous year (263 auditees).

The highest contributors to this figure were the KwaZulu-Natal transport department (R3.9bn), the Free State health department (R3.5bn) and the KwaZulu-Natal health department (R3bn).

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Overall, 698 employees at 24 government departments did not stop doing business with the State, despite being compelled to by the Amended Public Service Regulations by February 2017.

A further 649 were awarded new contracts.

Twenty-six audits were ultimately outstanding as of the cut-off date, compared to 11 the previous year, he said.

Makwetu ended by saying corruption thrived when a monopoly and discretion thrived under conditions that were devoid of accountability.

Situation 'worsening'

Scopa chairperson Themba Godi said the regression in departmental targets achieved was evidence of continued decline, despite the majority of the R1trn budget being spent.

"The Committee noted that the findings from the AG show that the situation is worsening at government departments and public entities," Godi said in a statement.

"The Committee was informed by the AG that, in key programmes, 22% of targets were achieved, while 67% were not achieved, whereas all the budgets were spent. The lowest achievements were in water and school infrastructure.

"The increase of irregular expenditure throughout government reflects how the mismanagement of finances, fraud and theft of public funds are not taken seriously in government.

Godi was also concerned that some entities did not submit financial statements by the August 31 cut-off date.

"These outcomes demonstrate that the lack of penalties for late submission or no submission poses a huge challenge for oversight bodies seeking redress in the management of finances in the public sector."

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Read more on:    parliament  |  auditor general  |  scopa  |  themba godi  |  kimi makwetu  |  cape town  |  service delivery

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