Riyaz Patel

Irregular expenditure by government departments and state-owned entities was up from just under R51bn in 2017/2018 to R61.3bn for the past financial year, Auditor-General Kimi Makwetu told a joint meeting of Parliament’s Standing Committees on Public Accounts and Appropriations.

Makwetu said the figure of R61.35bn included R18.5bn in irregular expenditure disclosed in the unaudited financial statements of departments and entities whose audits were still outstanding.

KwaZulu Natal (R12.42bn), national departments (R11.25 bn) and Gauteng (R7.13bn) were together responsible for 72% of the irregular expenditure.

Makwetu said the figures were not the full picture because it excluded irregular expenditure by some of the SOEs his office does not an audit, including Eskom and Transnet.

Audits still outstanding as at the end of last month included that of the SA Nuclear Energy Corporation, the Trans-Caledon Tunnel Authority and South African Airways, whose audit for 2017/18 was also not yet completed.

The Auditor-General said state-owned enterprises are increasingly relying on government guarantees to secure loans, and this trend, he warned, reflects badly on government debt and could result in credit downgrades.

The AG audits 14 state-owned enterprises. These include national broadcaster the SABC, airlines SA Express and SAA, the Post Office, the Land Bank and Denel.

The AG does not audit Eskom, diamond miner Alexkor or the Industrial Development Corporation, however, as it does not have the resources to do so, Makwetu told members of Parliament.

However, the AG said it’ll be deploying capacity to be the signing-off auditor for Transnet for the 2020/21 year.

Makwetu further outlined that during the 2018/19 year, government guarantees amounting to R446bn were issued to 11 SOE’s.

This included SOEs which are not audited by the AG.

“The total government exposure relating to these guarantees amount to R328bn,” the AG said.

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