North West SCOPA tells Education and Health Departments to provide detailed reports on addressing irregular expenditure
On, 14 March 2016, the North West Provincial Legislature’s Standing Committee on Provincial Public Accounts led by the Chairperson, Hon. Mahlakeng Mahlakeng requested the Department of Education and Sports Development and the Department of Health to provide detailed reports that addresses unauthorised, irregular and fruitless and wasteful expenditure that was incurred during the financial year 2014/15.
Both departments came to account to SCOPA on the Public Finance Management Act (PFMA) audit outcomes of the financial year 2014/15.
SCOPA Chairperson, Hon. Mahlakeng Mahlakeng said both departments must provide implementable strategies that will deal with officials who contravene supply chain management policies and create unauthorised, irregular and fruitless and wasteful expenditure.
“As a Standing Committee on Public Accounts, we need concrete action plans to investigate irregular expenditure which has ran into millions every year. If accounting officers do not investigate officials who create irregular, unauthorised and fruitless and wasteful expenditure in terms of Section 38 and Chapter 10 of the PFMA, the Committee will have no choice but to lay a charge of financial misconduct and contravention of this section of the PFMA against the accounting officer to the nearest branch of the South African Police Service,” said Hon. Mahlakeng.
He said the Committee is very worried about the arrogant nature of responses sent to the Committee by the Department of Health. “When we asked the department to provide root causes of the unauthorised, irregular and fruitless and wasteful expenditure, they showed total disrespect by referring the Committee to previous questions and answers in the document,” said Hon. Mahlakeng.
The Committee is also concerned about material underspending of conditional grants in the Education department which affects service delivery in public ordinary schools.
In the year under review, the Department of Health received an unqualified audit opinion and incurred an unauthorised expenditure of R262million, irregular expenditure of R763million and fruitless and wasteful expenditure of R20million.
Other matters of emphasis on the audit report includes lack of consequence management for poor performance and transgressions on supply chain management policies and leadership to provide oversight on the performance management unit.
The Department of Education and Sports Development also received an unqualified audit opinion and incurred an unauthorised expenditure of R8,7 million, irregular expenditure of R131 million and fruitless and wasteful expenditure of R408 000 in the current financial year. Other matters of emphasis include material underspending of R215 million mainly on programmes for Education infrastructure (R169 million) and for Public ordinary schools education (R18 million).
MEC for Department of Health, Dr. Magome Masike said the department has engaged the National Department of Health and the Department of Public Service and Administration to send additional presiding and investigation officers to fast-track delayed investigations of maladministration and corruption and finish them by July 2016.
“Some of the delays on investigations was due to incapacity in the department and some cases went beyond internal enquiries to other arms of government such as Labour Courts and South African Police Service. According to the Head of Department, written letters has subsequently been issued to Chief Directors and Programme Managers asking them to show cause why disciplinary action should not be taken against them for causing and/or permitting such irregular expenditure,” said MEC Dr. Masike.
He said the department is also relooking at rationalising the spatial distribution of primary healthcare facilities and the package of services currently provided to bring them in line with available operating budget.
MEC for Department for Education and Sports Development, Wendy Matsemela said the root causes of unauthorised expenditure reported in the annual financial statements resulted from overspending on compensation of employees which then caused over-expenditure. The department is working with Provincial Treasury to develop and implement measures that will curb overspending.
“Fruitless and wasteful expenditure resulted from interest charged on late payment of invoices. The internal audit unit is capacitated to detect potential irregular expenditure before it is incurred,” said MEC Matsemela. She said the department has developed Infrastructure Delivery Management System that will assist on spending of conditional grants accordingly.
Hon. Mahlakeng said the Department of Health should submit details of investigation conducted by National Department of Health and the National Treasury on all capital projects in the province. “We also need steps taken in respect of outcomes of forensic investigation that was conducted whereby the department is procured infant formula which was allowed to expire,” said Hon. Mahlakeng.
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Namhla Luhabe
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