No progress, no plans, no consequences for Education Department
The Department of Education's Portfolio committee, chaired by Gilbert Kganyago, on Tuesday heard that there was little improvement in the department's proposed cycle to 'plan, do, check and act cycle' to better its audit outcomes.
POLOKWANE – The office of the Auditor-General presented the outcomes of the department’s 2017/18 financial audit to the committee, and there was no good news for the committee, which is to do oversight on the department.
On accountability, the report stated that the status of the audit action plans regressed, as did the usefulness of performance indicators and targets.
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Internal controls, basic financial and performance controls regressed, while ICT controls remained unchanged. More positions in chief finance positions had, however been filled.
Compliance with consequence management for transgressions regressed and the investigation of the previous year’s closing balance of unauthorised, irregular as well as fruitless and wasteful expenditure (UIFW) regressed and some R5 506 million was not dealt with.
Investigations were also not conducted into all allegations of financial misconduct committed by some officials as required by Treasury. Supply chain management findings reported upon in the previous year also regressed and some tenders above R500 000 were awarded without obtaining quotations.
Tenders had also not been advertised for the required period. There are still officials doing business with the state (other departments) or the department, or close family members benefitting from contracts. Disciplinary steps were not taken against these officials.
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The department received a qualified audit from the AG for its annual financial statements and a disclaimer for its audit of predetermined objectives.
The department’s UIFW expenditure has shown an increase in the last three years.
Unauthorised expenditure increased from R279 million to R290 million, fruitless and wasteful expenditure from R186 million to R394 million and irregular expenditure from a R3,1 million to R4,8 million.
The reasons for these are expenditure not being in accordance with the budget vote, overspending of budget or programmes, expenditure that could have been avoided if reasonable steps were taken (such as for interest on debts), expenditure in vain and receiving no value for money as well as expenditure incurred in contravention of key legislation, and prescribed processes not being followed in the supply chain management process.
The AG found the review and monitoring of financial and performance reporting by the accounting officer to be inadequate, resulting in the financial statements containing material misstatements. The department’s action plan to address internal and external audit findings to ensure the root causes resulting in these findings are addressed, does not ensure this. Regular, accurate and complete financial and performance reports are not prepared and reports are not supported and evidenced by reliable information. Management do not respond with the required urgency to the AG’s messages to address risks and improve internal controls.
The committee concluded that they are not able to fulfill their oversight role and make decisive interventions as they do not receive management reports and annexures from the department which, for example, contain the names of transgressors, as “it might fall in the hands of the media”.
Kganyago said further engagement with the department will take place in this regard. They asked the AG for more information pertain to certain issues.
