The late former auditor-general (AG) Kimi Makwetu is credited with marshalling amendments to the Public Audit Act, informally referred to as the Kimi Laws in his remembrance. The laws were enacted after pleas for stronger controls of public finances.
Makwetu, in December 2019, told the standing committee on the auditor-general that instead of introducing the necessary controls, top government officials threatened audit officials or sought to bribe them. The AG’s audit findings, he told MPs, “are costing them [senior officials] their bonuses”.
He then challenged MPs to summon the officials “because ultimately when the rest of them who plan to do this see that happening, then they will think twice before they make even a veiled suggestion of that kind”. At the time, he was worried about unauthorised expenditure that had risen from R51bn to R62.6bn in the 2018⁄19 financial year.
This week Makwetu's successor, Tsakane Maluleke, put the figure at R166bn incurred by 286 state departments and entities. And the figure could be higher because some audits have yet to be finalised. Whatever the figure, it represents a deterioration, given that unauthorised expenditure stood at R109.82bn the financial year before, she said.
In a country with finite resources, it is plain that money must be used with circumspection
Three months earlier, Maluleke painted a grim picture of municipal finances, with R14bn in unauthorised expenditure for the 2020 financial year. In another report, much earlier, she found that state-owned enterprises had R25.9bn in irregular expenditure, with a paltry 28% providing the AG’s office with quality reports.
In her audit of public sector entities, 12 received disclaimers, which means their financial statements were in disarray. The same 12 also received disclaimers in the previous financial year, indicating an absence of effort.
Overall, the picture emerging from the above must trouble us all. In a country with finite resources, it is plain that money must be used with circumspection. The poverty and indignity in which most South Africans live is all the more reason every rand must be directed to alleviate that suffering.
Yet the AG’s reports paint an image of a government with a troubling lack of concern about how large sums are handled, or one that is at sea on what to do. Given the context, should reasonable South Africans expect an improved management of finances this time next year when Maluleke reports again?
While irregular expenditure does not necessarily mean money was stolen, it reveals poor controls, so that theft, among other malfeasances, could take place. What is worse than money being stolen is no-one knowing if this is happening because of the chaotic state of financial records.
It is hard to know if the chaos is a lack of financial management or a deliberate wrecking of the system to enable looting. Would it then be any wonder why, by October this year, the AG dealt with 121 material irregularities estimated at R11.9bn.
It was encouraging, though, that Maluleke has this year started using the Kimi Laws that allow her to quantify and recover financial losses, or issue a certificate of debt to the responsible accounting officer from whom the political principal must ensure the funds are recovered.
She has now slapped four government entities — the South African Post Office, the department of defence, the human settlements department in the Free State, and the Passenger Rail Agency of SA — with remedial action notices.
The Kimi Laws are an opportunity to hold accounting officers personally responsible for waste and mismanagement. Maluleke has reported only three of the 121 material irregularities to the Hawks for investigation as a start.
Given the extent of the rot, it is woefully insufficient. While the AG must be supported, it is also an indictment — not just of the so-called New Dawn but of all of us — that the mismanagement of funds meant to be used for our collective good is getting worse with each passing year.
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