Don't read this report late at night... The horror of state spending

It’s hard to believe that South Africans can still be shocked by reckless government spending. But wait til you read the latest report on irregular expenditure from the Auditor General.

The AG’s latest report states that irregular expenditure has increased by 55% to least R45.6-billion in the 2016/2017 financial year.

The figure could be higher‚ as financials from several entities have not been included. And‚ despite heightened scrutiny of state spending‚ it seems some are still trying to conceal what they have been up to.

“The total irregular expenditure incurred over the past four years was R128 billion‚” Auditor General Kimi Makwetu said.

“It is encouraging that the full disclosure of irregular expenditure is being addressed as it improves transparency and accountability.”

Here are some of the horrifying statistics from the report:

- Had all the audits been completed‚ the total irregular expenditure could have been around R65 billion.

- The bulk of the irregular expenditure (78%) was voluntarily disclosed.

- 22% of the irregular expenditure was uncovered during the audit.

- Most of the irregular expenditure (89% or R40 billion) was attributed to poor supply chain management.

- 67% incurred irregular expenditure compared to 72% last year‚ but irregular expenditure has been on an upscale over the last four years.

- The bulk of the irregular expenditure (64%) was as a result of non-compliance this year. Thirty-six percent was as a result of non-compliance in previous years and this had spilled over to this year.

Sectors with the highest expenditure were:

- Health: R12-billion

- Transport: R6.3-billion

- Education: R6-billion

Here are some of the reasons for the rising irregular expenditure:

- Some of it stemmed from previous years

- Poor consequence management

- Suppliers being appointed without a competitive bidding process

Makwetu said those whose audits were not completed at the time the report was finalised were usually the ones who had high irregular expenditure.

He mentioned the Passenger Railway Agency of SA (Prasa) as an example. Over the 2015-2016 financial year Prasa disclosed irregular expenditure of almost R14-billion.

This year‚ the AG did not receive Prasa’s financials in time as the entity did not have a board at the cut-off date for submissions. Without a board‚ there was no one to sign off and accept responsibility for the reports.