Unwanted expenditure (UIFW) nears R1.5 billion in the Free State

Unwanted expenditure (UIFW) nears R1.5 billion in the Free State

by Werner Pretorius – DA Spokesperson for Public Accounts in the Free State Legislature

The majority of Provincial Departments in the Free State continue to fail in the effective and efficient management of public funds and the provision of quality services, as demonstrated in the recent PFMA 2023/24 outcomes as presented by the Auditor General (AG).

On 29 October 2024, the AG presented a briefing to the Portfolio Committee on Public Accounts and Finance in the Free State Legislature on the audit outcomes of the Free State Departments and entities for the year ending 31 March 2024 (2023/2024).

The AG report for 2023/24 found that seven provincial departments and entities had qualified opinions with findings and 9 unqualified opinions with findings, with only the Treasury and the Provincial Legislature receiving a clean audit. Thus, only a mere 11% of departments and entities within the province received a clean audit. 89% of departments failed to some extent to provide quality financial statements, produce quality performance reports, monitor performance, or failed to comply with key legislation.

The DA is highly concerned about the drastic increase in fruitless and wasteful expenditure that nearly tripled from R104 million in 2022/23 to R309 million in 2023/24.

Similarly, unauthorised expenditure remained high at R193,16 million, with irregular expenditure being a whopping R984,37 million. The AG report found the 5 top contributors of irregular expenditure being the Department of Community Safety, Roads, and Transport (R349,75 million), education (R236,92 million), human settlements (R194,26 million), the office of the premier (R76,81 million), and department of sports, arts, culture, and recreation (R53,99 million). The total unwanted expenditure (UIFW) is a staggering R1,48 billion for the 2023/2024 financial year. These adverse findings negatively impact on service delivery in the province and hamper development in our communities.

The AG flagged the lack of accountability and the slow pace and implementation of consequence management in the province as one of the main contributing factors for the dismal audit outcomes. It is highly unfortunate that despite the repeat findings and remedial action called for by the AG, it was largely ignored by the ANC executive leadership and senior management. The audit outcomes could significantly improve if decisive action were taken against irregularities within departments and entities. One such example is the Department of Health, which has consistently received qualified audit opinions for the last 7 years (since 2018/19), and the office of the premier, which should set the tone for all other departments in the province, received a qualified audit opinion for the last six consecutive years (since 2019/2022). Clearly, there is a lack of political will or the interventions being implemented are not effective in turning the tide.

The DA remains concerned about the underspending in several departments despite massive backlogs in the delivery of services, infrastructure, and housing, to mention but a few.

The DA calls on the political leadership and accounting officers to commence and finalise the UIFW investigations and take decisive steps against individuals involved in unwanted expenditures. With increasing pressure on government fiscus, money must be spent on high-yielding projects and delivery of basic infrastructure and services. The DA will closely monitor the interventions by all departments, specifically that of the office of the premier and provincial treasury, to enhance financial management, transparency and accountability within the province. Calls on the AG to proceed with enforcement procedures where it is found that the departments are unresponsive to implementing corrective measures and implementing consequence management. This includes the AG moving for the implementation of certificates of debt if needed.

In a DA-run Free State Provincial Government, clean audits will be non-negotiable. Over the years, the DA-governed Western Cape and DA-led Municipalities across South Africa have proven that the DA manages public funds responsibly, spending money meant for the people on the people. The DA will scrutinise the individual AG reports on the departments over the next few days and provide our comments thereon.

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