Irregular South Africa government expenditure up 80 pct

PUBLISHED: Thu, 17 Nov 2016 08:43:20 GMT

Irregular expenditure by South African government departments swelled 80 percent to 43.4 billion rand ($3 billion) in the 2015-16 financial year, Auditor-General Kimi Makwetu said on Wednesday.

South Africa is trying to rein in spending and trim debt in the face of sluggish economic growth and looming decisions by major ratings agencies that could see it lose its investment grade status, a development that would lift borrowing costs.

Makwetu said in a statement after releasing his annual report that most of the irregular spending, which would have accounted for about 3 percent of total government spending, stemmed from non-compliance with regulations on the procurement of goods and services.

“Due to a lack of transparency and competitiveness, it remains to be seen whether prices are not inflated in the procurement processes,” the statement said.

Expenditure deemed “fruitless and wasteful” increased 14 percent since 2013-14 to 1.37 billion rand, the statement said, without providing a comparison to the 2014-15 financial year.

Makwetu said poor management, shoddy probes into allegations of financial transgressions, and vacancies that remain unfilled in key positions such as accounting officers, were “the root causes of … weaknesses in financial and performance management and the poor audit outcomes.”

Makwetu recommended improved monitoring of expenditure, the provision of compliance checklists to monitoring units and supervisors, and the implementation of formal codes of conduct but stopped short of calling for a probe.

The Treasury did not immediately comment on the report.

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