R296 billion – This is how much the South African government wasted in 5 years

South Africa’s national, provincial, and local governments wasted R296 billion in unauthorised, irregular, and fruitless and wasteful expenditure in the past five years.

This is according to a report in the City Press, which said Auditor General Kimi Makwetu’s reports for government departments show gross mismanagement of public funds.

Some of the findings in the Auditor General’s latest audit reports for national and provincial government include:

• A 121% increase in irregular expenditure between 2014/15 and 2017/18.
• A 68% increase in unauthorised expenditure between 2014/15 and 2017/18.
• A 236% increase in fruitless and wasteful expenditure between 2014/15 and 2017/18.

Makwetu told government bosses that this gross mismanagement of public funds is unacceptable, and that it needs to change.

“A culture of no consequences has been created through the leadership’s involvement in the decision making that led to transgressions,” he is quoted as saying by the City Press.

“The continued disregard for procurement processes by the leadership that resulted in irregular expenditure, coupled with limited consequences for the transgressions, created an environment vulnerable to misappropriation, wastage and the abuse of state funds.”

Highlights of the Auditor-General’s annual report

Key highlights of the Auditor-General’s annual report on government departments and state-owned companies include:

• Just 23% of national government departments obtained clean audits in the year through March, down from 30% the year before.
• Unauthorized expenditure rose 38% to R2.1 billion, while fruitless and wasteful expenditure surged more than 200% to R2.5 billion.
• Government entities incurred R51 billion in irregular expenditure. That excludes R28.4 billion in irregular expenditure by state-owned companies that aren’t audited by the Auditor-General.
• Contracts worth R6.5 billion couldn’t be audited due to missing or incomplete information.

National and provincial government departments are now facing an increased risk of litigation, with almost a third of them facing claims exceeding 10% of their next year’s budgets.

The biggest money wasters in government

The Auditor General’s annual audit report showed that the country’s government entities have racked up a wasteful and irregular expenditure bill exceeding R51 billion.

This figure, however, doesn’t include South Africa’s two biggest money wasters – Eskom and Transnet.

These two state-owned enterprises had their auditing done by private firms and have amassed a combined R28 billion in wasteful and irregular expenditure.

The table below shows the 10 worst culprits when looking at unauthorised, irregular and wasteful expenditure of public funds.

Reporting with Bloomberg

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