Deadline looms for defence department to resolve medical equipment mishap

The department of defence has until end of March to implement the auditor-general’s recommendations after purchasing medical equipment it could not use.

This was revealed by Auditor-General Tsakani Maluleke in a briefing to the standing committee of the auditor-general on material irregularities in national and provincial government on Friday.

The auditor-general flagged the irregularity in April 2023 after medical equipment was purchased when the department did not have qualified medical staff to operate it.

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The department was given until end of March 2024 to implement the auditor-general’s recommendations.

“If by the end of March the department has not resolved this material irregularity, we will move on to either referrals or to taking binding remedial action, which is doable only in a court of law,” said Maluleke.

“We always emphasise that we need not get to that point, because by the time we get to a recommendation, there has been ample opportunity for the accounting officers and the executives and Parliament to be acquainted with the matter and to take the necessary steps in line with their own given powers or authority.”

The auditor-general has previously referred two material irregularities in the department for further investigation.

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Material irregularity is any non-compliance with, or contravention of legislation, fraud, theft or a breach of a fiduciary duty identified during an audit, that resulted in or is likely to result in a material financial loss, the misuse or loss of a material public resource or substantial harm to a public sector institution or the general public.

Since 2018, the auditor-general has identified 266 cases of non-compliance and suspected fraud resulting in material financial loss in government.

Only R1.29 billion of it has been recovered.

According to the auditor-general, over R500 million is in the process of being prevented as loss, while R700 million is in the process of being recovered.

“As important as the protecting of R2.5 billion that has been protected is, because that money goes back into service delivery, the trick to driving better performance and use of public resources is to invest in preventative controls,” said Maluleke.

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Although Maluleke was optimistic about the recovery of public funds, she called on executive authorities and leadership, including the president and premiers, parliament and legislatures to address common indicators that lead to irregularities.

These bodies must also insist on accounting officers and authorities to address identified irregularities and monitor the progress made in resolving them.

“While it’s pleasing to see this level of responsiveness from internal auditors, our concern is that, in these material irregularities we raised, in at least 82% of the instances no action was being taken on the matters that we were raising. Accounting officers were either unaware that there were these problems, or were simply not attending to them until we raised the irregularity.

“The message we’ve given for a long time now, is that it is absolutely crucial that the level of responsiveness that we see from accounting officers and authorities when we are resolving irregularities, that level of responsiveness translates to more audit findings from either AGSA or internal audit.

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“It is absolutely essential that there be attention to designing proper internal controls to testing their effectiveness adequacy on a regular basis and to ensure there is responsiveness when things go wrong. It is going to be much better to prevent problems and detect them quickly rather than wait for the AG to raise these matters and then respond.”

According to the auditor-general, other irregularities in government departments include non-compliance in procurement processes, which result in overpricing of goods and services and payment for goods or services not received.

The auditor-general flagged 112 cases of such irregularities.

These include the department of basic education, which made a prepayment in March 2017 for bulk materials but didn’t receive the equivalent materials. After the auditor-general flagged the irregularity in July 2021, they recovered R21.6 million in March 2023.

In some instances, some of the public sector institutions either don’t submit their financials for audit or maintain records as they should.

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“It remains our hope that we will, over time, do away with the culture of tolerating public institutions that simply don’t submit financials for audit.”