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Auditor-general unearths R166bn in irregular expenditure

Auditor-general Tsakani Maluleke. File photo.
Auditor-general Tsakani Maluleke. File photo.
Image: Freddy Mavunda/Business Day

At least 44% of the R500bn Covid-19 relief package towards health response and relief of social and economic distress had been spent by end of March.

This is according to the 2020/21 Public Finance Management Act (PFMA) report by the auditor-general of SA (AGSA), which provided insights into how the government spent the budgeted relief package.

The package has been the subject of much criticism, with many South Africans suggesting it was “stolen”.

The AGSA report tabled before parliament on Wednesday provided clarity on how the money was used:

  • R218.54bn of the R500bn package was spent by the end of the financial year, mostly on bringing financial relief to poor households and support for workers.
  • R49.3bn was spent on the R350 special relief of distress grant.
  • R55.8bn was used to support businesses and workers, with at least 13.9-million people benefiting from temporary employee/employer relief scheme claims.
  • R21.96bn was spent on providing healthcare support and treatment for those affected by Covid-19.

  • R29.59bn went towards supplying frontline workers with personal protective equipment and quarantine facilities, among others.

  • At least R38.9bn of the budgeted R70bn was used towards providing tax relief, such as tax deferrals and the postponement of some payments to the SA Revenue Service.

  • R18bn of a budgeted R200bn went towards providing bank loans, guaranteed by the government, to eligible businesses.

  • R4.8bn was given to municipalities through repurposing of grants and additional allocations to help protect communities and frontline workers against Covid-19 and manage its impact.

Irregular expenditure

AG Tsakani Maluleke told the joint meeting of the standing committee on public accounts and the standing committee on the auditor-general of SA that irregular expenditure by provincial and national departments in the 2020/21 financial year amounted to R166bn incurred by 286 auditees.

This was an increase from R109.82bn in the 2019/20 financial year.

“For the first time, what we are seeing is that much of the irregular expenditure is not linked to procurement,” Maluleke said.

“At the NSFAS [National Student Financial Aid Scheme], they registered R77.5bn of irregular expenditure due to not complying with the bursary regulations, so it wasn’t procurement-related.

“Quite often when we report on irregular expenditure we talk a lot more about procurement, but an insight this year is that this one was not procurement-related.

“It’s important that we embrace a culture of compliance, disciplines of compliance and playing within the rules insofar as procurement is concerned or any other way that we engage with public finance.”

At least 115 auditees received a clean audit, made up of 48 departments and 67 public entities. There was a great improvement in the how finances had been managed, she said. This represented 19% of the expenditure budget of R1.9-trillion managed by national and provincial governments.

Twelve entities — including the South African Nuclear Energy Corporation, the National Skills Fund, four technical and vocational education and training colleges, and both the Free State and North West development corporations — received a disclaimed audit opinion, which is described as the worse audit opinion an auditee can get.

Maluleke said these entities were repeat offenders, as they had received the same opinion in the past financial year.


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