In her 2020/21 audit report, Auditor-General Tsakani Maluleke said effective steps were not taken to prevent irregular expenditure amounting to R179 million.
AUDITOR-General Tsakani Maluleke has fingered the Department of Water and Sanitation for not holding officials accountable for incurring irregular expenditure as well as fruitless and wasteful expenditure totalling more than R300 million.
In her 2020/21 audit report, Maluleke said effective steps were not taken to prevent irregular expenditure amounting to R179 million.
“The majority of the irregular expenditure related to prior year irregular contracts which were extended in the current year,” she said.
Maluleke also said effective steps were not taken to prevent fruitless and wasteful expenditure amounting to R157 million.
“The majority of the fruitless and wasteful expenditure disclosed in the financial statements was caused by loses or abnormal costs incurred on internal and external projects.”
The AG said the department did not make payments within 30 days after receipt of invoices.
Goods and services above R500,000 were procured without inviting competitive bids and deviations were approved but it was practical to invite competitive bids.
Maluleke said she was unable to obtain sufficient and appropriate audit evidence that disciplinary steps were taken against officials who had incurred irregular expenditure.
A similar finding was made on the fruitless and wasteful expenditure.
“I was unable to obtain sufficient appropriate audit evince that investigations were conducted into all allegation of financial misconduct committed by some officials,” she said.
This was blamed on determination into irregular expenditure being still in progress at the end of the financial year and non-implementation of recommendations from investigation reports.
“The accounting officer did not implement adequate consequence management processes for transgressions against applicable policies, laws and regulations,” she said.
Charles Motau, chairperson of the audit committee, said the committee noted that the financial statements were not supported by full and proper records.
Motau said improvement has been noted in the completeness of irregular expenditure during the 2020/2021 financial year.
“However, this process would require renewed effort from management with a specific focus on condonement processes to be followed in this regard. The system to identify irregular expenditure and the completeness of irregular expenditure should be strengthened.”
Motau also said the audit committee found the systems of internal control were inadequate and ineffective for some of the areas tested.
“These controls require further improvement and we have received assurance that the matter is being addressed,” he added.
Director-general Sean Phillips acknowledged that there were challenges with some implementing agents that did not adhere to supply chain management (SCM) processes resulting in several cases of irregular expenditure.
Phillips said the department has undertaken intervention measures, including the enhancement of contractual arrangements.
“Within the department, SCM processes and systems have been put in place to prevent irregular expenditure. A case in point is the system where all requests for contract extensions/ variations are reviewed and checked by the contract management unit prior to the approval by the relevant authority,” he said.
