Home Affairs’ muddy finances have turned decidedly messy

The department of home affairs has once again failed to improve its financial performance, according to the auditor-general (AG), while irregular expenditure had increased from R122 million in 2017-18 to R161 million last year.

According to the auditor-general during a parliamentary committee briefing on the audit outcomes of home affairs and the Electoral Commission of South Africa (IEC), over the past three years there had been no changes in the financial performance of the department and there were allegations of financial fraud, supply chain management misconduct, as well as lack of consequences.

The AG’s office said the home affairs and IEC’s audit outcomes had been unqualified, with findings, because both had disregarded requirements for compliance with legislation.

“The top four noncompliance areas identified were management of procurement and contracts, the quality of financial statements, prevention of unauthorised, irregular and fruitless and wasteful expenditure, and revenue management.

“Revenue management was an area of concern. There was inability by the [home affairs] to collect money owed, and fruitless and wasteful expenditure had increased from R108,000 to R151,000 over the past two years. Irregular expenditure had amounted to R122 million in 2017-18, and R161 million last year,” according to a parliamentary report.

The report also stated that the most common findings on supply chain management were uncompetitive and unfair procurement processes, as well as contracts that were extended or modified without the approval of a properly delegated official.

“[Home affairs] reported a 73% achievement rate for the year under review. This was a regression of 13% compared with 2017-18 financial year. The poor performance in part reflected its dependence on third parties and the enactment of enabling legislation,” stated the report.

“The IEC had awarded a R164 million contract to a bidder that did not comply with the evaluation/adjudication criteria that were stipulated in the original invitation for bidding. With regard to the [home affairs], there were allegations of financial fraud, supply chain management misconduct, and lack of consequences.”

The IEC’s annual financial statements revealed that the total revenue as at March 31, 2019 was just over R2 billion, while expenditure amounted to R1.553 billion.

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