AG finds irregular expenditure in excess of R160bn in govt

AG finds irregular expenditure in excess of R160bn in govt

Auditor-general Tsakane Maluleke has found irregular expenditure at national and provincial government departments in excess of R166 billion in the 2020/21 financial year. 

AG Tsakane Maluleke December 2021

Maluleke released the audit outcomes of government departments and their entities on Wednesday. 


A total of 679 departments and public entities were audited in the 2020/21 cycle but the report focused on the results of 425 audits. 


The latest bout of irregular expenditure is an increase from the R109 billion reported in the previous financial year. 


“Such expenditure, especially as it relates to procurement, is an indication that auditees do not follow supply chain laws and regulations when making decisions,” said Maluleke. 


The report also shows a whooping R1,72 billion was lost to fruitless and wasteful expenditure in the current year, with Maluleke pointing the finger at 224 auditees.


This includes key service delivery departments and state-owned enterprises which accounted for a combined 52% of the wastage. 


Health, Education, Housing and Public Works were among the departments flagged in the report.


These departments alone accounted for 90% of all unauthorised expenditure, which sits at a high R3,21 billion.


“Legal claims against government departments, particularly in the health sector, further reduce the limited funds available for intended programmes,” Maluleke added. 


“The provincial health departments paid out R1,76 billion for medical negligence claims, while the estimated settlement value of unpaid claims at year-end was R124,15 billion (75% of the total claims against the state). 


“Seven provincial health departments had unpaid claims at year-end that exceeded their entire operational budget for the next year.”


Maluleke’s report found that 115 out of the 425 department and entities received a clean audit - 61 of these managed to retain their clean audit status since the first year of the current administration. 


“There are 115 auditees (48 departments and 67 public entities) that obtained a clean audit outcome, compared to 109 in the previous year. Together, these auditees are responsible for 19% of the R1,9 trillion expenditure budget managed by national and provincial government.


“At least 31 auditees are close to obtaining a clean audit and require sustained effort to reach this goal,” said Maluleke. 


While the AG’s office admitted there was some great improvement in the overall financial performance of government department and their entities, Maluleke admitted there was still a lot of ground to cover.


Read full report below:

AG finds irregular expenditure in excess of R160bn in govt by Jacaranda FM News on Scribd


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