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CRITICAL: Deputy auditor-general Kimi Makwetu

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IRREGULAR spending in national and provincial departments and state entities increased from R13-billion to R21-billion between April 2010 and March 2011.

The auditor-general dropped this bombshell yesterday during a briefing to Parliament's standing committee on public accounts (Scopa) on the audit outcomes of all state departments.

Deputy auditor-general Kimi Makwetu told the public finance watchdog that 39 departments and entities had incurred irregular expenditure of R21-billion for the year under review.

Irregular expenditure occurs when government departments or any other public entity spends money without adhering to the Public Finance Management Act (PFMA) such as following open tender processes in the procurement of goods and services above the threshold of R500,000.

Makwetu said the flouting of government procurement practices was largely responsible for the increase in irregular expenditure.

"This is what we are picking up here, situations where sourcing of goods (and services) has happened but there was no compliance with those (PFMA) prescripts," Makwetu said.

Makwetu said the public sector was still not near the goal of achieving universal clean audits.

"We are still further away from getting the ideal outcomes in the national sphere of government.

"In terms of non-compliance, 92% of national departments are in the red, meaning that they have not complied with whatever applicable laws and regulations they needed to comply with," Makwetu said.

Scopa chairman Themba Godi said even though the auditor-general was "virtually baby sitting government departments, it was disappointing that they continued to produce poor audit results".

Provincial government departments accounted for the big chunk of government's irregular expenditure at R17-billion, the national departments spent R2.2-billion without following the relevant laws while other public entities, including provincial legislatures, were responsible for the balance.

The bulk of government spending takes place mainly at a provincial level as it is provincial departments that are responsible for delivering infrastructure such as schools, roads, houses and health care facilities.

Of concern, Makwetu told MPs, was that more than half of the irregular expenditure (R13.3-billion) had been under-reported by government departments and was only picked up by his office during audits.

"We have isolated three areas of key internal control that need to be in place, one of which is the role of leadership in setting the tone in each of these departments, the ability to get financial and performance management properly done as well as the role of audit committees and internal audit (units) in providing oversight."

A total of 44 national and provincial government departments, out of a total of 121 that were audited, got poor audit outcomes such as qualified opinions.

One national department and three provincial departments received disclaimers - the worst opinion an entity can receive.

These are the Department of Public Works, the North West department of public works and the health departments of the Northern Cape and Limpopo.

This means that there has been no significant improvement from last year's audit outcomes, in which 43 government departments performed poorly.

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Fri May 24 12:00:10 SAST 2013 ::

Oct 20, 2011

Reyataz

That's ANC for you- utterly clueless on good governance and only interested in enriching themselves!
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Oct 20, 2011

dre10

THe problem are the senior managers who always come Supply Chain Management with urgent orders. THey want orders to be expediated so that their friends can receive work from government. To work in a supply chain in government its so stressfull everyone wants to intervene.
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Oct 20, 2011

SunshineS

Wow, well done AGSA. The public has to know where their tax monies are being utilised. It is unfortunate that after this many attempts of assisting the government departments the outcomes are worse than what were in the previous financial year.

Perhaps AGSA needs to get their forensic teams geared up for action so to identify the officials perpetrating such acts within the govt departments and public entities.
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Oct 20, 2011

ref_12

This is bad, considering that the National Department should lead by example since they are the custodian of this policies. All the senior manager must also be trained about the procurement processes, it looks like they are clueless. We need expertise in this areas.
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Oct 20, 2011

MsKinkyakaKamaSutra

@Mr Makwetu, do your findings also include or exclude Zuma's splurging........... Front page, The Star, 20 October 2011
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Oct 20, 2011

WAMANYORA

This whole mess started by the then President Mbeki by privatising and outsoursing of cretical gorvenment services dept using tendering method. tendering method is a foundation of corupption and financial maladministration.
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Oct 20, 2011

dre10

ref_12

they know about this supply chain. they want certain steps to be bypassed so that their realtives can benefit.
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Oct 20, 2011

WAMANYORA

Imagine working for a security company which is contracted for three years and paying me R1800-00 and expect me to guard goods to the value of millions and they are paid 7 millions per annum. i will help myself too with the goods to increase my salary. people must be employed permanently.
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Oct 20, 2011

RobinH

So much for all the over-publicised "plans" and "audit structures" everyone discusses but seems unable to introduce. I find it disgusting that our high ranking officials stoop to robbing our nation in this manner, and let's face it, tthis sort of thing is not done at a low level. The self-styled "creme de la creme" are the ones skimming the thickest cream. Show me an honest ANC-aligned official and you'll be showing a blank page.
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Oct 20, 2011

Mndende

Ayi this country is a bl00dy disgrace everyone is eating the money into their pockets....
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