State entities falling under National Treasury incurred a combined R1bn in irregular expenditure in the 2018/19 financial year, Parliament's Standing Committee on Finance heard on Tuesday.
The committee was addressed by a delegation from the office of the Auditor General.
Irregular expenditure, according to the Auditor General’s auditing standards, is any expenditure outside of the procurement guidelines, even though goods or services were received.
Liezl Kestlmeier, senior manager at the Auditor General SA, told the committee that the combined irregular expenditure for the 16 entities reporting to National Treasury went from R960m in the 2017/18 financial year to R1bn in the 2018/19 financial year.
"The biggest contributor of irregular expenditure was National Treasury itself and SARS. Irregular expenditure incurred by National Treasury amounted to R466m and R454m was incurred by SARS," Kestlmeier said.
Kestlmeier said the majority of the irregular expenditure was caused by a lack of proper adherence to procurement processes. Kestlmeier said uncompetitive and unfair procurement processes were found at 47% of the auditees.
"When it comes to supply chain management, we found that contracts awarded differed from original invitations for bidding and contracts extended or modified without approval of a delegated official," Kestlmeier.
Kestlmeier said instability and prolonged vacancies in key positions had the potential to cause competency gaps and that this had a negative effect on audit outcomes.
Over the past five years, the audit outcomes in the National Treasury portfolio regressed from 44% unqualified audits with no findings in the 2014/15 financial year to just 25% in 2018/19.