Wasteful spending by South African public sector hits R24 billion

22 March 2013

☛ Want the latest procurement and supply chain news delivered straight to your inbox? Sign up for the Supply Management Daily

24 March 2013 | Anna Reynolds

The annual audit of provincial and national government bodies in South Africa has revealed R24.8 billion (£1.7 billion) has been lost in irregular and wasteful spending.

The figure is almost R4 billion (£281 million) higher than the previous year while the report showed only 22 per cent of national and provincial entities received clean audits.

The Congress of South African Trade Unions (COSATU), said it was “appalled” by the figure. It also raised concerns about the fact that the amount of government business carried out by the family members of employees rose to R141 million (£9.9 million), which could indicate staff are finding ways to disguise their involvement in state business.

In the report, auditor general Terence Nombembe blamed weak internal controls, poor political leadership and a disregard for procurement rules for the huge leak of public funds. He was also critical of purchasing processes that did not include the necessary criteria of taking competitive bids, apply the preference point system and require SA revenue service tax certificates.

The audit also uncovered unlawful practices in supply chain management, with 85 per cent of provincial departments not meeting the guidelines. Leadership positions were left vacant for months and some not even advertised.

Nombembe called for the government to be monitored collaboratively, rather than wait for his yearly report. He said senior management, accounting officers and executive authorities should self-monitor to detect and prevent non-compliance of laws in government’s internal processes.

In response, South Africa’s political leaders said firm measures will be put in place to strengthen public sector governance, including the public service administrative initiatives linked to the National Development Plan, which aims to eliminate the country’s poverty through the transformation of public services.

COSATU welcomed this but stressed change will only occur if those found guilty of fraud or corruption are prosecuted.

Patrick Craven, spokesperson for the COSTAU, said in a statement: “So long as a culture of ‘absolutely no consequences’ for offenders persists, we shall continue to receive more depressing reports for years to come. It is time to turn words into action and do everything possible to ensure that every cent of public money is properly spent for the purposes it was budgeted for.

“The auditor general, and the Treasury who allocate the money, should also continuously monitor and check systems and procedures in all departments and provinces, so that we do not only pick up these problems once a year when the auditor general issues his annual report.”

LATEST
JOBS
Swindon, Wiltshire
upto £40K base (+ Paid overtime and corporate benefits)
Honda Manufacturing Ltd
Kew gardens, Richmond upon Thames, London (Greater)
£37,000 - £42,500 per annum pro rata, depending on skills and experience
Kew Royal Botanic Gardens
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE