Consumer watchdog's irregular expenditure jumps more than 10%


The National Consumer Commission failed to achieve a clean audit for the 2018/19 financial year, members of Parliament heard.

The NCC's acting commissioner Thezi Mabuza, and other executives on Tuesday briefed Parliament's portfolio committee on trade and industry on the financial outcomes for the 2018/19 financial year.

The NCC is the primary regulator of consumer-business interaction in South Africa. It falls under the oversight of the Department of Trade and Industry (dti) to ensure the economic welfare of consumers. Its key strategic outcomes are to promote consumer protection and consumer safety, promote the reform of consumer policy and compliance with consumer protection laws and ensure public awareness of consumer protection.

Among the notable cases investigated by the NCC were consumer complaints into the timeshare industry as well as investigations into the combustion of Ford Kuga engines.

The NCC received an unqualified audit opinion for the 2018/19 financial year, Mabuza said.

Of the 28 findings made, 25 or 89.2% were resolved during and after the audit, according to the presentation submitted to Parliament. There are ongoing action plans for the three unresolved findings, which are being tracked on a monthly basis.

While the entity retained a surplus of R17.8m and reported a net cash position of R16.1m, it reported irregular expenditure of R1.55m for the period. This is up 11% from the R1.39m reported in the previous period.

Irregular expenditure

Of the R1.55m in irregular expenditure, just over R836 000 transactions were incurred during the 2018/19 year with the balance incurred in previous years, according to Chief Financial Officer Anton van der Merwe.

Causes of irregular expenditure included unauthorised deviation from supply chain management policies, payments exceeding contracted amounts and quotations not being obtained for three transactions.

In its presentation, the NCC explained that one of the notable findings related to a contract with the State Information Technology Agency – which was not disclosed in the relevant year. The computer expenses incurred amounted more than R465 000.

Van der Merwe said the NCC is in a process of consequence management against staff causing the irregular expenditure. "So if there is negligence, we are issuing or addressing it in accordance with disciplinary requirements," he said.

Fruitless and wasteful expenditure amounted to R91 387. The NCC said that the causes have been investigated and losses have been recovered. Qualifying cases of fruitless and wasteful expenditure have also been written off.

Among the causes of fruitless and wasteful expenditure were a fine from the South African Revenue Service issued for failing to make a payment on the date required by SARS. Another supplier claimed VAT on its invoices when it was not registered for VAT.

Van der Merwe said the NCC is awaiting a refund of the amounts paid and the supplier will be reported to National Treasury to be listed on a database preventing other public entities from doing business with it in future.

About R51 000 of fruitless and wasteful expendiutre is attributed to duplicated travel costs.

The NCC said corrective steps were being taken to improve audit outcomes going forward so the entity can achieve a clean audit. 

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