AG names “irregular spenders”, lists defence


The Auditor-General (AG)’s office has “named and shamed” departments guilty of irregular expenditure in the last financial year, with Defence being the worst offender. That department racked up more than R1 billion in irregular expenditure, accounting for 43% of the government’s total bill of irregular expenditure of just under R3.9-billion in 2009/10.

Secretary for Defence Mpumi Mpofu last month said the irregular spending included R480 million in “unauthorised” salary increases [apparently approved by President Jacob Zuma and defence minister Lindiwe Sisulu but not by Treasury], the payment for the cancellation of the Airbus A400M military transport aircraft, housing allowances and the use of various consultants. But,overall, for the 20009/10 period there was only one qualification by the AG compared with six in the preceding year.

Mpofu added the key to the department’s inability to account completely for its assets – which was the qualification – is that it uses a manual registry system and its logistical accounting systems are geared towards NATO prescripts rather than National Treasury requirements. This was being addressed, she said at he time.

Lashman Kevish, a business executive in the AG’s office, yesterday told Members of Parliament (MPs) that the Department of Justice & Constitutional Development was second on the list, with R805 million, followed by the Department of Home Affairs in third place with R321 million. In total, government departments accumulated R2.3 billion in irregular expenditure. Almost one-half of that was owing to supply chain management irregularities, Kevish said in a briefing to the portfolio committee on public service and administration.

The presidency was guilty of just under R1 million in irregular expenditure but had the dubious distinction of featuring in all five categories of flawed tender and contract management specified in the Public Finance Management Act. These ranged from failing to invite three price quotations for awarding contracts to suppliers who failed to provide valid tax clearance certificates. Kevish said that 61 public entities made themselves guilty of a total of R1.589-million in irregular expenditure in the last financial year.

Here the three worst offenders were the Road Traffic Management Corporation with R360 million, the National Prosecuting Authority with R273 million and the Property Management Trading Entity with R264 million. The State Information Technology Agency accumulated R214 million in irregular expenditure and CIPRO, the companies registrar, R95 million. In both cases the full amount was attributed to flawed procurement.

MPs described the figures cited by Kevish as “vast” and “frightening”. Public Service and Administration Minister Richard Baloyi said that government was committed to rooting out corruption and breaches of the PFMA. It hoped to combat tender fraud in particular by placing all procurement on a central electronic database so that it could be accessed and scrutinised “at the click of a button”, he added.

The minister rejected as alarmist a remark by the Democratic Alliance’s Anchen Dreyer that the AG’s figures were proof that the “wholesale looting” of state resources had placed South Africa on the brink of becoming a failed state. Dreyer said the country did not need more anti-corruption units and regulations but for those already in place to yield results. In a debate on corruption in the National Assembly yesterday, Finance Minister Pravin Gordhan said the perception that government lacked the political will to tackle it was false.