Cape Town - Auditor- General Tsakani Maluleke said actions taken by government institutions on material irregularities picked up by her office during audits prevented R626 million in losses from taking place in the 2022/23 financial year.
Maluleke said R506 million in financial losses were in the process of being recovered and R14 million had been recovered during the financial year.
“We have been able through actions of those who got material irregularities to prevent financial losses from taking place to the value of R636 million.
“Our aim is not to issue certificates of death but to enable corrective action so that material irregularities are resolved and we can prevent similar ones in the future,” Maluleke said.
She made the statement when she was briefing the standing committee on the auditor-general on Friday.
The Public Audit Amendment Act, signed into law four years ago, empowers Maluleke to refer suspected material irregularities found during audits to law enforcement agencies for further investigation.
It also compels department heads to take appropriate remedial steps where irregularities exist.
In her presentation to the committee, Maluleke said the Department of Defence imported an unregistered drug, Heberon, at a cost of about R260m without approval from the SA Health Products Regulatory Authority.
“The unused vials were repatriated to Cuba, preventing an estimated financial loss of R227m.”
She also said the Property Management Trading Entity made payments to a landlord for leasing properties in excess of the amount payable as per the lease agreement, resulting in an estimated R11m in overpayments.
“By March 31, 2022, R9,7m had been recovered from the landlord and the remaining amount was in the process of being recovered.”
Maluleke also said the KwaZulu-Natal Department of Health procured sanitiser detergent at a significantly higher price than mandated by the Treasury, resulting in a R1.3m financial loss.
“Acknowledgement of debt was signed with the supplier, resulting in R5m of the loss being recovered.”
Multiple instances of non-compliance by Prasa were identified in the procurement process for locomotives in July 2012, she said.
“Seven officials were charged with procurement irregularities and are being subjected to disciplinary processes; so far, one official has been dismissed; another has resigned.”
The A-G stated that the national Department of Co-operative Governance made payments to non-qualifying government employees as part of the community work programme.
“In response to the recommendations we made and an internal investigation, the accounting officer referred the matter to the Directorate for Priority Crime Investigation (Hawks) for investigation. The accounting officer also took disciplinary steps against the responsible officials.”
Maluleke said the Eastern Cape Department of Human Settlements awarded three contracts for housing units to bidders who did not score the highest points.
“On an application by the accounting officer, the high court set aside two of the contracts, declaring them invalid, which prevented an estimated financial loss of R6.45m.”
Sassa has been able to recover R134m irregularly paid to ineligible beneficiaries in the R350 grants.
Maluleke said of the 124 active material irregularities her office identified, 14 were resolved, and appropriate action was taken in 91 cases.
She also said the material irregularities in terms of non-compliance and fraud resulted in financial losses estimated at R12bn in 169 incidents.
“No actions were taken to address 82% of these matters until we issued notifications.”
However, Maluleke noted that 36 officials were subjected to disciplinary processes and some were dismissed.
“There are investigations of fraud and corruption and criminal activity that are already under way,” she said in reference to 15 investigations and five supplier contracts were stopped.
She said team Auditor-General South Africa was proud of the impact it had because institutions were responding to their reports as expected.
“We have been able to get officers to shift from inaction to action, which is what we want to see,” Maluleke said.
Cape Times