The Provincial Government has incurred irregular expenditure amounting to R2,5 billion in the previous financial year which is a marginal decrease from R2,6 billion that was recorded in 2016/17.
This was highlighted in the Auditor-General (AG) of South Africa Kimi Makwetu’s 2017/18 consolidated general report on national and provincial audit outcomes that was released in Cape Town last Wednesday. The report indicated that the total irregular expenditure included R1,1 billion arising from multi-year contracts, while the balance of R1,4 billion resulted from non-compliance with legislation identified in the year under review.
It was reported that over a four-year period, the province’s audit outcomes have slightly improved but regressed when compared to the prior year. The Limpopo Gambling Board regressed from a clean audit status while further regressions were noted at Great North Transport and Gateway Airports Authority Limited from unqualified opinions with findings to qualified opinions, report highlighted.
Makwetu indicated that most auditees remained stagnant on either an unqualified opinion with findings or a qualified while an improvement shown by Cooperative Governance, Human Settlements and Traditional Affairs as well as Agriculture and Rural Development as they moved from qualified opinions to unqualified opinions with findings. The provincial treasury should further be commended for sustaining its clean audit opinion from the prior year, he stressed.
Makwetu stated that irregular expenditure of only R305 million was written off, condoned or transferred to receivables, which is especially concerning when looking at the total irregular expenditure incurred on multi-year contracts. The highest contributors to the irregular expenditure were pointed out as the departments of Education R957 million, Cooperative Governance, Human Settlements and Traditional Affairs R825 million and Roads Agency Limpopo R270 million.
He said these three auditees alone accounted for R2,1 billion or 83% of the disclosed irregular expenditure. Overall, R2,4 billion or 96% of the incurred amount was as a result of the contravention of supply chain management regulations, he stated. Limpopo incurred fruitless and wasteful expenditure of R215 million in the previous financial year while R139 million was recorded in 2016/17, it was learnt.
“The province cannot afford the inefficient use of public resources in light of the significant financial sustainability challenges it is facing. Strong financial discipline is required to manage, monitor and spend funds to ensure the most effective, efficient and economical use of resources. The province’s financial health has weakened from the previous two years. The decline can be attributed to inadequate processes to ensure sound financial management,” Makwetu stressed.
Following the release of the report, the Democratic Alliance (DA) in Limpopo is intending to write to Premier Stan Mathabatha to stress that he implements the AG’s recommendations in their entirety and consider putting some departments under administration, the party said in a statement.
Earlier, Premier spokesperson Kenny Mathivha said the Provincial Government was satisfied with the audit outcomes for the previous financial year but stressed that concerns still existed over the departments of Health and Education due to their bad financial history.
Mathivha emphasised that the provincial audit report was expected to be tabled in the Legislature in a few weeks’ time and that there was no regression in Limpopo. He added that in the last meeting the Executive Council had with the AG, Mathabatha said that a lot still needed to be done for the Provincial Government to improve on its audits.
Story: ENDY SENYATSI
>>endy@observer.co.za
