Cape Town - The provincial departments of Human Settlements, Education and Community Safety have been found to be the Western Cape’s top contributors to annual irregular expenditure to the tune of R330 million.
The province’s finances came under the microscope as the Auditor-General of South Africa (AGSA) and provincial treasury briefed the legislature’s budget committee to mark the start of the audit report season.
AGSA Western Cape business unit leader Sangeeta Kallen said the annual irregular expenditure incurred by the three departments worked out as R221.6m, R58.6m and R25.6m respectively.
Kallen said the provincial Department of Human Settlements accounted for 67% of the irregular expenditure in the province, mainly due to four procurement findings.
She said that during the 2020-21 financial year, Human Settlements was notified of one material irregularity with an estimated financial loss of R5.9m with regard to its Finance Linked Individual Subsidy Programme (Flisp) subsidies.
She said the household income of beneficiaries was incorrectly calculated, resulting in invalid beneficiaries qualifying for the housing subsidy or subsidies paid at incorrect amounts.
However, Kallen said that after the department’s accounting officer submitted representations, the AGSA team assessed these as a valid response during the 2021-22 period.
“Financial loss was not recovered but Human Settlements improved controls to ensure that only valid beneficiaries receive subsidies at the correct amounts and as such the Material Irregularity has been resolved.”
Head of Department for Community Safety advocate Yashina Pillay said during the year under review the department of Community Safety discovered irregular expenditure to the value of more than R25 million that arose due to conflicting Supply Chain Management provisions against which contract extensions were evaluated.
She said the department brought the matter to the attention of the AGSA who initially viewed it as regular, however upon the department’s insistence, agreed that it was in fact irregular.
“It should be noted that there was no fraud and corruption nor did any staff member benefit in any way from these contract extensions. Services were rendered fully by the service providers and the department received value for money.”
AGSA reported that while 85.7% of Western Cape departments, including the legislature, received clean audits marked as unqualified with no findings, 14.3% received unqualified audits with findings.
Finance and Economic Opportunities MEC Mireille Wenger singled out the Health Department for special mention and said it was remarkable that a department under so much pressure during the pandemic was able to achieve the best possible opinion.
She congratulated Health MEC Nomafrench Mbombo and head of department, Dr Keith Cloete, on their leadership of the department.
Budget committee chairperson Deidré Baartman (DA) said fruitless and wasteful expenditure was less than 0.001% of the total provincial budget for 2021/22, with no unauthorised expenditure in the past three financial years.
Committee member Lulama Mvimbi (ANC) said now that the province had a handle on compliance, it was high time for a plan to implement performance auditing of government institutions.