Public Works 'loses' R2.1bn

The Department of Public Works is unable to account for more than R2.1-billion in capital expenditure, and money spent on goods and services, during its 2010-2011 financial year, says the auditor-general.

And this, says the DA, means that Public Works Minister Gwen Mahlangu-Nkabinde deserves to be fired.

In the department's latest annual report, tabled in parliament yesterday, the auditor-general said that he was not satisfied with the department's accounting for its expenditure of R819.046-million on goods and services, or for R1.340-billion in expenditure on capital assets.

He gave the department the most negative audit opinion available to him - a disclaimer.

The auditor-general said he could not obtain from the department adequate evidence as to the obligations entailed in, or the valuation and classification of, lease commitments entered into by Public Works of R115-million.

He said that reported irregular and wasteful expenditure of more than R16-million understated the situation. The department had no financial system in place with which to identify irregular spending, so Nombembe was unable to satisfy himself that only R1.3-million had been spent irregularly.

Public Works received an appropriation of R7.365-billion for the 2010-2011 financial year compared with R6.049-billion for the previous year. In the last financial year it spent 90% of its budget compared with 94% the year before.

In her foreward to the annual report, Mahlangu-Nkabinde made no mention of the debacle surrounding the leasing for the police, for almost R2-billion, of office buildings in Pretoria and Durban.

Public Protector Thuli Madonsela found in her investigation of the leases that Mahlangu-Nkabinde was guilty of maladministration in authorising the leases at rates far above their market norm.

Mahlangu-Nkabinde has applied for a court order that the leases be invalidated.

The auditor-general said that the Department of Public Works had underspent its budget for the management of its immovable assets by R235-million, and for its job-creating expanded public works programme by R500-million. As a result, the department did not achieve its objectives of fast-tracking the construction of schools and in the promotion of energy efficiency.

"In [respect] of the expanded public works programme, the bulk of the under-expenditure was due to the infrastructure grant to provinces and municipalities not being transferred due to the under-reporting and poor performance by the reporting bodies eligible for the incentive grant," the auditor-general said.

As in previous years, the auditor-general was unable to verify that the department owned buildings valued at R3.4-billion, as it claims, because the buildings register was not complete.