'Inadequate' action against Dirco staff responsible for irregular, wasteful expenditure - AG

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International Relations and Cooperation Minister Naledi Pandor
International Relations and Cooperation Minister Naledi Pandor
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  • The Auditor-General has highlighted irregular expenditure and management challenges as severe problems in the Department of International Relations and Cooperation.
  • Irregular expenditure from three financial years ago has still not been investigated.
  • The AG also found that inadequate disciplinary action had been taken against staff responsible for irregular expenditure.

Historic irregular expenditure worth millions in the Department of International Relations and Cooperation (Dirco) has still not been investigated, sending a clear message that the department cannot discipline its staff guilty of mismanagement.

On Wednesday, the Auditor-General (AG) detailed the financial affairs of Dirco for the financial year 2020-'21 ending March 2021.

Polani Sokombela, a business executive at the AG, highlighted irregular expenditure and management challenges as serious problems in Dirco.

Sokombela said in his presentation:

Overall, the portfolio is struggling with consequence management as irregular expenditure arising from 2017-'18, 2018-'19 and 2019-'20 has not been investigated by the department, resulting in poor consequence management. The non-compliance findings were raised relating to the lack of investigation. There is inadequate disciplinary action taken against staff who have caused irregular, fruitless and wasteful expenditure due to lack of investigations.

Sokombela said Dirco received a financially qualified audit opinion with findings on compliance with legislation.

The African Renaissance and International Cooperation Fund (ARF) received an unqualified opinion with no findings.

"The prevalent instances of non-compliance are in the areas of expenditure management, supply chain management, consequence management and material misstatements identified in the financial statements submitted for audit. Findings raised are, in most instances, recurring findings, indicating that audit action plans and the culture of consequence management is not exercised effectively.

READ | 'A national embarrassment' - Naledi Pandor on Dirco's botched multimillion-rand New York project

"The department is still struggling to resolve the prior year's qualification area on current receivables (disallowance and damages account) even though there were efforts to address this matter. As part of the audit action plan for the current year, this is an area that the department has prioritised to resolve. Even though the department has obtained the services of a forensic investigation firm to assist in addressing the qualification area, this did not have a positive impact," Sokombela said.

The department has reduced the material misstatements from R186 million to a balance of R73 million.

Misstatements refer to incorrect or omitted information in financial statements.

Compliance with legislation, however, remained a concern when compared to the prior year.

"The department has continued to incur irregular expenditure due to non-compliance with legislation. The department has incurred irregular expenditure relating to the current year, amounting to R14.6 million when compared to the prior year of R7.3 million. This represents a 50% increase in irregular expenditure. The increase in new irregular expenditure in the current year is as a result of non-compliance with legislation findings on supply chain management (SCM) processes," Sokombela said.

The AG believed International Relations and Cooperation Minister Naledi Pandor implemented "consequence management at the highest level".

This has, however, not filtered down to the rest of the department.

"Irregular expenditure arising from 2017-'18, 2018-'19 and 2019-'20 has not been investigated by the department, resulting in poor consequence management. We urge the department to investigate all the irregular and fruitless and wasteful expenditures. Failure to implement consequence management encourages a culture where there is a disregard for legislation, policies, and procedures thrive in any organisation. The department needs also to ensure that the current action plan is enhanced to address the repeat findings in compliance with legislation," it said.


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