Parliament, Tuesday, 22 October 2024 – Today, the Auditor-General of South Africa (AGSA) briefed the Standing Committee on Appropriations on national government departments and State-Owned Entities (SOEs) that incurred irregular, fruitless, and wasteful expenditure in the last five financial years.
The committee heard that legislation empowering the Office of the Auditor-General to act appropriately against accounting officers cited for wasting public funds would remain ineffective when the root cause is at senior management.
According to the AG, 36 departments incurred R1.48 billion in fruitless and wasteful expenditure in the last five years, and 27 SOEs incurred R2.08 billion. Thirty-eight government departments incurred irregular expenditures in the last five years, totalling R50.65 billion, while 27 SOEs recorded irregular expenditure of R69.35 billion.
Committee members noted that there has been an increase in fruitless and wasteful expenditure in the last five years and that AGSA needs to be capacitated to have more teeth to address funds wasted through fruitless and wasteful expenditure. The committee further said measures must be implemented to stop rampant fruitless and wasteful expenditure and the use of external auditing firms by local municipalities without any tangible improvements in their financial controls.
The AG further reported that for the 2022/23 financial year, there were 266 material irregularities pointing to non-compliance and suspected fraud, with an estimated cost of R14.34 billion. The AGSA informed the committee that material irregularities include cases where a hospital is built and millions of rands on equipment installed. Still, the building remains unutilised or inaccessible as intended.
Committee Chairperson, Mr Mmusi Maimane, said, “We have a situation where we have leadership at the top tasked with effecting consequence management to their subordinates. However, those at the top are of poor leadership quality themselves. And it is obvious that if you have dreadful leadership at the top, you will get dreadful results every time.”
The committee urged the AGSA to use its powers and issue certificates of debt to at least the top five accounting officers of offending departments, saying that this action could prompt greater compliance from many accounting officers.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE STANDING COMMITTEE ON APPROPRIATIONS, MR MMUSI MAIMANE.
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