South Africa
R 46 Billion in Irregular expenditure by National & Provincial Govt

The auditor-general (AG), Kimi Makwetu, reported a slight improvement in the audit results of national and provincial governments over the past three years.

Releasing this year’s audit outcomes of national and provincial government departments and public entities (auditees), Makwetu revealed that in the three-year period under review (2013-14 to 2015-16), 24 % of the auditees improved their audit results; 14 % regressed; while the results of the majority (62 %) remained unchanged.

He further announced that during this period, public entities fared the best with continuous improvement year on year; however, the audit results of departments regressed in 2015-16.

Irregular expenditure has increased by almost 40% since 2013-14 to R46,36 billion – the increase from the previous year was nearly 80%.

The main reason for the increase in irregular expenditure was the continued non-compliance with supply chain management legislation. Irregular expenditure represents expenditure incurred towards procurement of goods and services without following prescribed processes.

Six auditees were responsible for just over 50% of the irregular expenditure in 2015-16.

They include the Passenger Rail Agency of South Africa, the KwaZulu-Natal and Mpumalanga departments of Health, the
Road and Transport and Human Settlements departments in Gauteng and the Department of Water and Sanitation.

Fruitless and wasteful expenditure in 2015-16 was 14% higher than in 2013-14 at R 1,37 billion, and was again incurred by an increasing number of auditees.

Six auditees were responsible for just more than 70% of this expenditure – again the Passenger Rail Agency of South Africa and the Department of Water and Sanitation are included in this list, joined by three departments in the
education sector and the Compensation Fund.

Unauthorised expenditure has decreased by just over 50% since 2013-14 to R 925 million as a result of interventions at national and provincial levels.

The main reason for the unauthorised expenditure remained overspending of the budget.

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