Auditor-General Tsakani Maluleke blamed the state of affairs on internal control deficiencies that resulted in material findings on compliance with legislation.
The Basic Education Department, which is struggling to avert a looming crisis of teacher post cuts, could not prevent nearly R200 million in irregular expenditure being run up during the 2023-24 financial year.
Auditor-General Tsakani Maluleke found that no effective and appropriate steps were taken to prevent irregular expenditure amounting to R188 354 000, as disclosed in note 24 to the annual financial statements, as required by Section 38(1)(c)(ii) of the Public Finance Management Act (PFMA) and Treasury regulation 9.1.1.
“The majority of the irregular expenditure was caused by non-compliance with the Preferential Procurement Policy Framework Act (PPPFA),” Maluleke said.
She found that some of the contracts awarded by the department to bidders did not score the highest points in the evaluation process as required by the Preferential Procurement Policy Framework Act and the Preferential Procurement Regulation.
The A-G had found similar non-compliance in the prior year.
Maluleke blamed the state of affairs on internal control deficiencies that resulted in material findings on compliance with legislation.
“The department did not have adequate systems in place to monitor the compliance with all applicable legislations, resulting in material non-compliances.”
The irregular expenditure comes at a time the department is engaging the national and provincial treasuries on additional funds.
These are intended to alleviate the pressures facing the education sector, even if it is for the short-term, and to prevent further cuts in teaching posts and such critical support services as school nutrition and transport.
Archbishop Thabo Makgoba is the latest figure to slam the government for the education “funding crisis” besetting the department.
“The failure of the government to increase funding for provincial education departments to cover the salary increases granted to public servants has thrown the education sector into a funding crisis in which provinces have to decide what to cut to be able to pay the increases,” Makgoba said.
If a modern workforce was to be educated, he said there should be increasing investment in education, not a reduction.
“Adopting ‘austerity measures’ in the fields of education, health and social welfare is a recipe for trouble,” said Makgoba.
In her report, Maluleke also found that disciplinary steps were not taken against officials who had incurred and permitted irregular expenditure, as required by the PFMA.
“I was unable to obtain sufficient appropriate audit evidence that disciplinary steps were taken against officials who had incurred fruitless and wasteful expenditure, as required by Section 38(1)(h)(iii) of the PFMA. This was because investigations into fruitless and wasteful expenditure were not performed,” she said.
Maluleke also found that the department incurred R8.9 million in fruitless and wasteful expenditure.
“The majority of the fruitless and wasteful expenditure was caused by projects that were cancelled due to duplicate allocation to the implementing agents and/or change of scope.”
Audit committee chairperson Professor Daniel van der Nest said the committee concurred and accepted the conclusions of the Auditor-General on the annual financial statements.
“It was identified that the system of internal control was not entirely effective during the year under review.
“Several instances of non-compliance with internal controls were reported by both Internal Audit and the AGSA,” Van der Nest said.
He said the management during the year put measures in place to improve the control environment of the Accelerated School Infrastructure Development Initiative.
It also conducted various site monitoring on projects.
Van der Nest noted that status reports were presented by management on progress relating to consequence management.
He said the department will be monitored to improve controls to prevent further irregular expenditure and fruitless and wasteful expenditure.
Head of department Mathanzima Mweli said supply chain management (SCM) processes and systems to prevent irregular expenditure were in place.
“The SCM policy has been reviewed, including the latest regulations and National Treasury instruction notes,” Mweli said.
He also said officials have been guided on how to implement the latest regulations and instruction notes.
However, he said challenges were experienced in SCM as the directorate was under-capacitated on managerial positions.
“Capacity is limited to lower positions for SCM practitioners.
“There are vacant positions but could not be filled due to National Treasury’s cost containment measures.”
Cape Times