Free State is the only province that has not obtained a single clean audit in the 2018/2019 financial year.
This is according to Auditor-General Kimi Makwetu, who released national and provincial governments’ latest audit results on Wednesday in Pretoria.
Makwetu said Free State’s financial health is in “a very bad state, with 69% of the auditees requiring urgent intervention.” It also had the highest unauthorised, fruitless and wasteful expenditure of all the provinces.
‘Culture of no consequence’
“A culture of no consequence prevails, and the political leadership is involved in the decision-making at some auditees,” Makwetu added.
In contrast, Western Cape was the best performing province, with 79% of its departments and public entities receiving clean audits.
Gauteng followed with 30%, while Eastern Cape had 25%, KwaZulu-Natal 24%, and Mpumalanga 18%.
18% of Northern Cape’s departments and entities obtained clean audits. Limpopo (11%) and North West (6%), which was put under administration last year, were among the worst performers.
R62.6 billion in irregular expenditure
In overall terms, national and provincial governments and their entities incurred R62.6 billion in irregular expenditure. This rose from R51 billion in the 2017/2018 financial year.
While this does not necessarily mean the entire amount was lost to corruption, it points to “serious weaknesses in financial management,” Makwetu said.
The Auditor-General added, “Fruitless and wasteful expenditure continued to rise, with 223 auditees losing R849 million in the current year. Over the five-year period, R4.16 billion of government expenditure was fruitless and wasteful.”
He said state-owned enterprises (SOEs) require urgent attention because they continued to regress from the previous financial year and none of them obtained a clean audit this year.
“Government cannot afford to lose money because of poor decision-making, neglect or inefficiencies,” Makwetu added.
Fruitless and wasteful expenditure, “which is effectively money lost,” increased by 7% from the previous financial year, he explained.
This increase was mainly caused by the national Department of Energy’s loss of R110 million and Free State Department of Health’s loss of R101 million.