Staff Reporter
The Free State Treasury has identified officials in different departments whose actions may have resulted in the provincial government incurring irregular expenditure in the past few years.
Finance MEC Gadija Brown said in her budget vote speech delivered in Frankfort that audit firm PwC conducted an investigation between March 2019 and March this year to establish the root cause of the irregular expenditure and those allowing the financial blight to persist.
“To reduce the accumulated irregular expenditure . . . the provincial treasury initiated an intervention project for the investigation of irregular expenditure incurred in previous years to reduce the backlog in investigations,” she said.
The project, according to Brown, started in March 2019 with investigations in five departments and one government entity.
It continued for a period of two years to make provision for additional irregular expenditure cases of other departments and entities to be added to the project.
The contract ended on March 12, 2021.
The MEC said various remedial controls were recommended to prevent future irregular expenditure and enhance existing internal controls.
“. . . consequence management is an integral plan in reducing the irregular expenditure in the province and therefore each investigation report that was finalised by PwC included the names and roles of all officials involved in the procurement and payment process that led to irregular expenditure,” she said.
“This will allow accounting officers to consider and implement the relevant disciplinary processes through their human resource and legal units.
“This should also set the tone for changing the behaviour of officials when it gets to compliance with laws and regulations with procurement of goods and services.”
Her budget vote speech coincided with Auditor General Tsakani Maluleke’s report on national and provincial government departments released on Wednesday morning.
In her report on the Free State, Maluleke bemoaned what she described as a culture of no consequences created through the political and administrative leadership’s inability to take action against pervasive non-compliance with the law.
She said this left state resources vulnerable to misappropriation, wastage and abuse.
But Brown declared in her speech that things had changed as the provincial treasury will closely monitor the reporting of irregular expenditure by departments and entities on a monthly basis.
The MEC said the provincial office of the auditor general was also engaging chief financial officers from all departments on a regular basis to check measures being implemented to prevent irregular expenditure and other shortcomings.
The Free State Treasury is the only provincial department that achieved a clean audit in the 2019-20 financial year.
This is also known as an unqualified audit opinion with no findings.
The total number of qualified audit findings in the province improved by 34 percent from 47 qualification findings in 2018/19 to 31 in 2019/20.
The number of findings on non-compliance with legislation improved by 12 percent from 193 findings in 2018/19 to 169 in 2019/20.
Brown expressed confidence that the 2020/21 audit outcomes will reflect further improvement.
