Auditor General finds good and bad in DoDMV and its entities

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Minister Nosiviwe Mapisa-Nqakula’s Department of Defence and Military Veterans (DoDMV) ran up a bill of over R900 million in “irregular, fruitless and wasteful expenditure” during the 2015/16 financial year.

Notwithstanding the Department of Defence (DoD) retained its unqualified opinion with findings status in the Auditor General’s annual national and provincial outcomes and the Department of Military Veterans (DMV) was given a qualified opinion.

Auditor General Mimi Makwetu noted both the DoD and DMV showed a slight improvement in compliance with legislation but there was “still insufficient review and monitoring of compliance with legislation and policies at both departments. This resulted in failure to prevent irregular and fruitless and wasteful expenditure, implementation of proper expenditure management and adherence to procurement and contract management practices”.

Supply chain irregularities and other cases of non-compliance with legislation resulted in irregular expenditure of R917 million for the portfolio.

This, Makwetu said, was a 22.5% increase from the previous year. A total of R810 million of irregular expenditure was due to non-compliance with procurement processes and the remaining R107 million related to other cases of non-compliance.

He recommends entities in the portfolio should strengthen controls over supply chain management processes and consequence management should be implemented.

The Auditor General also noted both the DoD and the DMV did not ensure proper expenditure management controls were implemented, which resulted in long-outstanding creditors at year-end. “If not managed properly, this could lead to the departments incurring unauthorised expenditure as the previous year’s creditors may be paid using current year budgets.”

The SA National Defence Force (SANDF) was given a clean bill of health by Makwetu with the Special Defence Account (SDA) earned a qualified opinion with findings. This, he said, was because of the inherent limitation to the sensitivity of the environments in which the SDA operates.

Another DoDMV entity, the Castle Control Board (CCB) improved from an unqualified opinion with findings in the previous financial year to a clean audit.

The Auditor General also audited 10 of the country’s major public entities with Armscor again earning a clean audit opinion. Armscor chief executive Kevin Wakeford said the commitment of the defence and security acquisition agency’s employees had made it possible for Armscor to “efficiently and effectively deliver” on its mandate.



In his closing remarks on the overall government defence sector, Makwetu said: “The good practices displayed by Armscor, the SANDF and the CCB should be continued to sustain clean audit outcomes. These practices include regular preparation and review of financial and performance reports, basic financial disciplines, using effective governance structures and implementing consequence management against transgressors”.