Auditor-General Tsakani Maluleke.
- The Auditor-General said 21 of the government’s 41 national departments consistently incurred fruitless and wasteful expenditure in the past five years.
- Material irregularities at national departments caused an estimated financial loss of R8.6 billion over the past five years.
- The Department of Defence, National Treasury, and the Department of Basic Education incurred the highest fruitless and wasteful expenditure.
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The Auditor-General (AG) of South Africa warned the legislature that half of the government’s national departments consistently incurred fruitless and wasteful expenditure over the past five years.
Briefing Parliament on Friday, the AG warned that 21 of the government’s national departments consistently incurred fruitless and wasteful expenditure in the past five financial years, in contravention of the Public Finance Management Act (PFMA).
Among the government’s 157 departments at a national, provincial, and local government level, 64 are in good financial health, while the financial health of 79 departments is “of concern”, and 14 require urgent intervention.
Departments requiring intervention account for R130 billion of government spending in the 2020/21 financial year. Those departments whose financial health was of concern accounted for R850 billion in spending.
The office of the AG’s written submission to Parliament’s Standing Committee on Appropriations said over the past five years, R1.52 billion in fruitless and wasteful expenditure was incurred by 41 departments.
“In terms of spending, 21 of 41 national departments, or 51%, incurred fruitless and wasteful expenditure for the past five years,” the office submitted to Parliament.
The Department of Defence incurred the highest cumulative fruitless and wasteful expenditure over the five-year period, at R460 million, followed by National Treasury at R339.4 million and the Department of Basic Education at R106.8 million.
The quantum of fruitless and wasteful expenditure by government departments has consistently stayed above R100 million for the past five years but surged to a high of R625.9 million in the 2017/18 financial year. By 2020/21 it had settled back down, albeit at R199.9 million.
The submission said material irregularities – a separate category to fruitless and wasteful expenditure – brought to the attention of accounting officers and authorities at national departments caused an estimated financial loss of R8.6 billion over the past five years.
To make matters worse, the AG found underspending in vital programmes, namely human settlement development, schools backlog, and health facility revitalisation.
“[The AG] will continue to engage oversight committees as part of the budgetary review and recommendations report process, sharing insights on issues that affect service delivery and place pressure on the fiscus, and that require oversight and intervention,” the submission said.