Block allocations to provinces that continually misspend, says OUTA
The audit outcomes for national and provincial government for 2021/22 are extremely disappointing and point to a government that does not place citizens at the epicentre of its spending decisions.
The outcomes are detailed in the report of the Auditor-General South Africa (AG), published this week.
We welcome the few positive outcomes highlighted in the report, such as the improvement in the number of unqualified audit outcomes from 117 (28%) to 128 (30%). However, the reality is that we still have 122 departments (26%) – who control around 50% of the state’s R2.58 trillion spending – with unacceptable audit outcomes (qualified with findings, disclaimers or outstanding audits).
While there is an indication of corrective action being taken by accounting officers on material irregularities (MIs) reported by the AG’s office, the R1.1 billion in losses prevented, recoveries made and recoveries in process due to action taken is less than 10% of the R12 billion of estimated financial loss incurred from 179 MIs reported.
This is a clear indication to the South African public that our current government administration, which has now completed three years of its five-year term, does not take the management of the country’s finances seriously.
While the AGSA indicates there needs to be a shared vision of responsiveness, consequence management, good governance and accountability throughout government, including executive authorities, Parliament and legislatures, we believe this is a picture far from the reality, where a lack of accountability, monitoring and oversight roles are largely neglected, giving rise to billions of rand lost through fraud, corruption and other material irregularities.
A total of R51.22 billion was identified as irregular expenditure, of which 75% arose from breaches in legislation. It is very disturbing when the AG reports that 30% of prior findings were not even investigated by the accounting authorities, which is essentially a gross disrespect of taxpayers’ money. Despite this, we have no doubt that none of the people responsible were held to account.
There are far too many departments leasing empty buildings, or paying exorbitant office rental rates long after their leases have expired. OUTA believes those accounting authorities who have signed and extended leases at above market-related prices should be held accountable and dismissed.
OUTA calls on Treasury to withhold allocations to the worst performing provinces of Free State, North West and Limpopo, which have a habit of misspending allocated directed to them. Treasury should find new mechanisms which include civil society to ensure that grant allocations have robust spending oversight.
OUTA also calls on the AG to apply her powers stringently to enforce accountability against errant accounting officers.
The AG report on national and provincial audit outcomes 2021/22 is here.
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