AG finds “material misstatements” in DMV annual report

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Further evidence the Department of Military Veterans (DMV) qualifies for a serial offender title when it comes to service delivery – and other failures – comes from the Auditor-General’s (AG’s) budgetary review and recommendations report (BRRR) for the 2022/23 financial year.

Eleven pages of the BRRR are devoted to the DMV with the remainder of Tsakani Maluleke’s report on dealing with Minister Thandi Modise’s Department of Defence (DoD); Armscor; and the Castle Control Board (responsible for managing South Africa’s oldest building, the Castle of Good Hope).

As an example, the BRRR has it “material misstatements were reported” in financial statements, meaning “financial reports are therefore not reliable and credible to support decisions made by management and other stakeholder who place reliance on the financial reports (DoD and DMV).”

The Auditor-General found some reported DMV achievements did not agree with supporting evidence, which “could result in the underachievement being more than reported. The reliability of the reasons for the reported underachievements could also not be confirmed for some indicators due to lack of evidence to substantiate these.”

Specifically, several indicators did not agree with supporting evidence and these include percentage of burial claims approved and paid within 30 days; veterans and dependants approved for skills development programmes; and number of military veterans provided with access to business facilitation programmes.

Missed targets

The DMV only achieved 55% of its annual targets for 2022/23, for example missing its targets for veterans approved to access newly built houses as well as pension benefits, healthcare services, skills development programmes, business facilitation programmes, and employment placement opportunities.

Only 222 veterans had access to new houses in 2022/23 out of a target of 355. A total of 595 files were processed by the verification panel out of a target of 1 440; subsidised public transport was on hold because of “continuing engagements with stakeholders due to the complexity in the subsidised public transport sector”.

Out of a target of 2 000, no pensions were approved during the year as the pension regulations were still being approved. This changed early in October when Minister Thandi Modise gazetted the new regulations, which still await an implementation date.

For 2022/23, the DMV reported the achievement of 915 against a target of 3 500 for veterans’ skills development programme approval and 105 veterans provided with access to business facilitation programmes, against a target of 110. No veterans were provided with access to employment placement opportunities (target: 30) due to “capacity challenges”.

Auditor-General staff found that for the key programmes of the Department of Military Veterans, there was no correlation between achievement of targets and budget spent. For example, for Programme 2 (socio-economic support), 33% of targets were met with 88% of the allocated budget used. For Programme 3 (empowerment and stakeholder management), 29% of targets were achieved while 98% of the budget was spent.

“This was because DMV spent some of the funds allocated for the current year to pay for prior year goods and services, resulting in the spending not being aligned to the department’s current year performance,” the Auditor-General explained.

The main impact of target non-achievement, the BRRR reads, is “delayed benefits to military veterans which has a negative impact on key service delivery objectives of the DMV”.

The AG audit further noted cases where the DMV provided benefits to people not on the veterans database, something raised in the previous financial year. This earned the DMV a rebuke that reads “management has not taken adequate measures to address this matter and ensure that benefits are provided to bona fide military veterans that are registered in the database”.

Inadequate checks and inadequate co-ordination with “other state institutions” are areas where those responsible for military veterans’ wellbeing are warned to improve by government’s financial watchdog. For example, regarding veterans’ housing, the DMV reported 222 veterans were given access to newly built houses in 2022/23, but “for 97% of the reported achievement the department could not provide evidence that the military veterans were also approved to get a house by the Department of Human Settlements.”