Government racks up R72.6bn irregular expenditure bill

By Luke Daniel for The South African 

Government departments and state owned enterprises (SOE) have accumulated irregular expenditure exceeding R72.6-billion.

This is according to an analysis undertaken by the official opposition party, the Democratic Alliance (DA), which has since been reported on by Fin24. The party held a media briefing on Sunday, citing the 2017/18 annual financial reports released by government departments and SOEs.

What is irregular expenditure?
Simply put, irregular expenditure is a term used to describe the gross mismanagement of funds, particularly within the realm of governmental departments and state entities.

Technically, any costs involving state funds which fall outside the parameters of the Public Finance Management Act can be described as irregular expenditure. This wanton wastage of funds is a particularly painful thorn in the side of South Africa’s already uneasy economy, further embittering taxpayers as their hard-earned cash, effectively, goes to waste.

DA says total irregular expenditure could be much more
Natasha Mazzone, the DA’s Shadow Minister of Public Enterprises, addressed the media briefing, adding that not all government departments and SOEs had finalised their financial reports, meaning that the actual amount of irregular expenditure could be much higher.

The official opposition party pointed out that irregular expenditure stood at R42.8 billion last year. This year, that amount has increased by 70%.

Mazzone bemoaned the unsustainability of SOEs, adding that despite revitalisation strategies, most companies still remain wholly incompetent and reliant on government bailouts, saying:

“SOEs are going from one bailout to the next, one disaster to the next. It’s got to a point where it doesn’t matter who you put in the boards because the entities are so broken, it is almost impossible to fix.”

Government irregular expenditure: the main culprits
The DA made its report on the government’s irregular expenditure public, listing, in order, the entities which have recorded the greatest losses.

Here are the top wasters of public funds:

  • Eskom – 19.6 billion
  • South African National Roads Agency (SANRAL) – R10.5 billion
  • Transnet – R8.1 billion
  • Department of Water and Sanitation – R6.2 billion
  • South African Broadcasting Corporation (SABC) – R5 billion
  • Water Trading Entity – R4.9 billion
  • Department of Correctional Services – R3.2 billion
  • Property Trading Management Entity (PTME) – R2.3 billion
  • Department of Basic Education – R1.7 billion
  • Department of Defence – R1.7 billion
  • Department of International Relations and Cooperation (DIRCO) – R1.2 billion
  • South African Social Security Agency (SASSA) – R1.7 billion
  • South African Post Office (SAPO) – R1 billion

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