AG Report shows few clean audits, waste in state-owned enterprises

AG Report shows few clean audits, waste in state-owned enterprises

- Kimi Makwetu has released his report on the state of government owned entities including provincial and national departments

- Wasteful and irregular expenditure has increased from the 2017 financial year, cutting into the budget for next year

- Higher risk of legal action against departments will incur even more costs, putting pressure on service delivery funding

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Auditor General Kimi Makwetu has released his report on the current state of government owned institutions and the results were grim.

The report included the financials of provincial and national departments which showed a “massive regression” in audit outcomes for this financial year.

Irregular expenditure sat at R51 billion for the government which included R28 million from Eskom and Transnet alone.

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The Road Accident Fund was responsible for 75% of the R35.1 billion deficit incurred by public entities with regards to expenditure exceeding their revenue. Another institution that was a huge source of wasteful expenditure.

“Unauthorised expenditure increased by 38% from the previous year to R2.1 billion, 86% of which was a result of overspending,” according to the report.

“Fruitless and wasteful expenditure increased by over 200% from the previous year to R2.5 billion. Irregular expenditure continued to remain high at R51 billion. This total includes the irregular expenditure of those auditees where the AGSA had completed the audits after the cut-off date of this report (R5.4 billion).”

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The Citizen reported that the figure of R51 billion reportedly does not even include SOEs, according to Makwetu.

Only 23% of the audits received a clean outcome dropping from 30% for the 2017 financial year.

“There were serious weaknesses in the financial management of national and provincial government that had not been addressed over the past four years,” the report finds.

The DA-led Western Cape produced 83% clean audits, with Gauteng coming in second with 52%

The outcome of the report sees an increased risk of legal action against government departments with a third of departments already having claims in excess of 10% of next year's budget.

Funds intended for service delivery will instead going to these costs as the departments don’t have budgets for claims.

The amount of non-compliance in those audited saw a spike to 72% from last years 72%.

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Source: Briefly.co.za

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