Cape Town - Details have emerged of non-adherence to national and provincial treasury instructions by Western Cape provincial departments and entities that resulted in irregular expenditure as well as fruitless and wasteful expenditure to the tune of more than R670 million.
A written answer by Finance and Economic Opportunities MEC David Maynier to a query from the ANC shows that between 2019 and 2021 the Western Cape lost R676 million.
Maynier said the worst offenders were the premier’s office, the departments of Human Settlements, Health and Education, as well the Western Cape Liquor Authority.
He was responding to a query from provincial ANC finance spokesperson Nomi Nkondlo, who had asked for the details of irregular expenditure as well as fruitless and wasteful expenditure incurred by each provincial department and entity between 2019 and 2021.
Nkondlo also wanted to know how much of the expenditure had been incurred as a result of not adhering to national and provincial treasury instructions and why these instructions had not been adhered to.
Fruitless and wasteful expenditure is defined in the Public Finance Management Act as “expenditure which was made in vain and would have been avoided had reasonable care been exercised.”
Maynier said to the best of his knowledge all national treasury and provincial treasury instructions were generally implemented by the Province in full to the extent that they were applicable and implementable.
“However, there may still be isolated instances of non-adherence to national and provincial treasury instructions by departments and provincial entities.” He said the main contributor to the irregular expenditure was isolated instances of non-compliance with procurement requirements that emanated from national treasury instructions and circulars.
“Much of this expenditure can be attributed to a difference of opinion between provincial departments and entities, and the auditors on the interpretation of national treasury instructions and circulars.”
Maynier said it was important to understand that many instances of reported irregular expenditure and fruitless and wasteful expenditure were instances of non-compliance, where repeat findings were not prevalent. He said the auditor-general’s report did not give details on any fraud or corruption in relation to the reported irregular and fruitless and wasteful expenditure.
With regard to the non-adherence, Maynier said Nkondlo should direct her questions to the individual MECs in respect of the departments and provincial entities for which they were responsible.
Reacting to Maynier’s response, Nkondlo said the ANC remained concerned by the high irregular expenditure and fruitless and wasteful expenditure incurred.
“We had hoped the MEC would provide more details regarding the nature of each of these transgressions, especially on fruitless and wasteful expenditure for which the Education Department and Premier’s Department incurred the highest expenditure."
She said the premier should do better and lead by example but that of most concern was “the sense of brazenness and impunity with which these transgressions are committed.”
She said Human Settlements MEC Tertuis Simmers‘ department had incurred the highest irregular expenditure for the Province for two consecutive years but that Simmers had yet to be reprimanded for this by the premier.
She said Maynier was wrong to downplay this issue by referring to it as isolated instances of non-compliance with procurement requirements
“Maynier’s remarks seem to indicate a culture of tolerance and comfort by the accounting authority on issues of non-compliance with legislation.”
She said irregular expenditure is mainly caused by weaknesses in supply chain management and weak internal control environment.
She accused Maynier of running away from accountability and said that while it was true that supply chain management (SCM) functions were run by individual departments, in terms of the SCM strategy, it was up to the provincial government’s SCM to ensure effective management and oversight of financial systems.
She said the provincial treasury should assist provincial departments and provincial public entities to build their capacity for efficient, effective and transparent financial management.
Nkondlo said she still wanted to hear the reasons given by the departments for the non-compliance and called for an assurance that remedial action would be put in place to prevent a re-occurrence.