PRETORIA, The Auditor-General, Kimi Makwetu, has expressed concern that irregular expenditure by South African government departments has increased by 55 per cent since the previous year to 45.6 billion Rand (about3.24 billion US dollars) and warns that the amount may actually be higher.

Briefing the media when he released the much-anticipated report of the audit outcomes of national and provincial departments for the year 2016/17 here Wednesday, he said the amount of irregular expenditure did not include the irregular expenditure of organizations such as the Passenger Rail Agency of South Africa (PRASA), where the audits are still ongoing.

He also said that 25 of the audited departments and organizations had disclosed that they had incurred irregular expenditures but that the full amount was not known. Makwetu added that 28 auditees were qualified as the amount they had disclosed was incomplete.

The increase in irregular expenditures, the Auditor-General said, could be attributed to continued weaknesses in the supply chain management. Although deviations are allowed, we found that it had often not been approved or, if approved, the deviation was not reasonable or justified, he said.

He added that auditees in the provinces of KwaZulu-Natal, Free State, Limpopo and Eastern Cape were the main contributors to the increase in irregular expenditure compared with the previous year. The sectors with the highest amounts of irregular expenditure were health, transport and education.

Makwetu said he had, over the years, voiced concern at contracts being awarded to government employees and their families without any declaration being made. Although there was no legislation which prohibits making awards to suppliers in which state officials have an interest, the amended Public Service Regulations prohibited employees of departments from doing business with the State since August 2016.

He noted that departments were tasked with monitoring compliance with this regulation. Based on the findings in just the first six months of implementation, it seems that this responsibility is not being given the attention it deserves, he said.

The Auditor-General also said that there was an emerging trend where departments and entities continued to contest the audit findings of his office, adding that this trend intensified during the 2016/ 17 fiscal year.

It is unacceptable for those we audit to question and challenge the outcome of audits based on evidence and solid accounting interpretations or legal grounds. We also acknowledge that many of the accounting and legal matters dealt with in the audits are complex and often open to interpretation, he said.