R166 billion in irregular expenditure an indictment on Ramaphosa’s ‘new dawn’ – DA

The Democratic Alliance (DA) says the increase in irregular expenditure to R166 billion by national and provincial departments is the clearest evidence yet that President Cyril Ramaphosa’s promise of a “new dawn” has failed to deal with financial malfeasance in government and across state-owned enterprises (SOEs).

The official opposition was reacting to the release of the audit outcomes for national and provincial departments, as well as SOEs, on Wednesday by Auditor-General (AG) Tsakani Maluleke for the 2020-2021 financial year.

According to Maluleke, the R166 billion in irregular expenditure was an increase from R109 billion in the previous financial year.

“Such expenditure, especially when it relates to procurement, is an indication that auditees do not follow supply chain laws and regulations when they’re making procurement decisions,” Maluleke said, speaking at a media briefing in Tshwane.

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The AG blamed this on poor quality financial statements, non-compliance with procurement and contract management, and lack of consequence management for offending parties, among other reasons.

DA chief whip in Parliament Natasha Mazzone called on the AG to use her powers, as contained in the Public Audit Act, to hold offending parties to account by ensuring that there is clear and transparent consequence management.

She said the legislation gave the AG power to enforce the implementation of recommendations arising from her office’s audit outcomes.

“This 34% increase [in irregular expenditure] has largely been driven by irregular spending by the National Student Financial Aid Scheme [Nsfas], confirming the escalating corporate governance crisis currently besetting this entity.

“Unless a concerted effort is made to appoint competent professionals and implement a sound turnaround strategy, there is a real risk that Nsfas will plunge the higher education sector into chaos,” Mazzone said in a statement.

Struggling SOEs

The AG also revealed that of the 17 state-owned enterprises (SOEs) that were audited, the financial health for 76% of them was “of concern” while 15% required intervention.

Mazzone said this negative state of affairs of SOEs underlined the empty promises made by Ramaphosa to turn around the parastatals.

“Unless public-private partnerships are implemented, the ANC government’s intransigence will continue to place the fiscus in a perilous position as they resort to bailouts to keep these SOEs afloat,” she said.

The DA also celebrated that the Western Cape government retained its position as the province with the highest number of clean audits, with 15 departments getting a clean bill of financial health.

“The DA’s commitment to residents in the Western Cape to run clean governments remains intact.

“The DA difference is the enduring promise that will save South Africa from the destruction wrought by ANC corruption and bad governance,” Mazzone said.

Compiled by Thapelo Lekabe