Manage spending by following procurement rules

The Deputy Auditor General of South Africa said, "the failure to stick to proper procurement rules almost invariably led to a failure to manage spending." We've seen plenty of instances of exactly that lesson on Guam, too.

AG faults biggest state spenders for poor reporting

[Deputy Auditor General Kimi Madwetu said] "They are doing their accounting properly but failing the test in terms of complying with the system of sourcing goods and services."

This resulted in irregular expenditure of R2.286-billion by national departments, most of which was not identified by the departments themselves but by the AG's office.

Provincial departments, public entities and legislatures racked up another R18.4-billion in irregular expenditure for the past financial year.

"In terms of non-compliance, 92% of national departments are in the red, meaning that they have not complied with whatever applicable laws and regulations they needed to comply with," Makwetu said.

Most "would easily migrate [from in the red] to the green" if they made an effort to account properly on predetermined objectives and to comply with laws and regulations, notably supply chain management rules.

He said the failure to stick to proper procurement rules almost invariably led to a failure to manage spending.

"If procurement and contract management is not complied with the chances are that expenditure is also not going to be complied with. It is very interesting to see the correlation between the two."

A breakdown of the reasons for the adverse findings on supply chain management showed that unfair procurement and award contracts to government officials and their close family members were by far the biggest problems.

The deputy auditor-general on Wednesday lamented the lack of improved accounting in education, health and public works, as most state spending flowed through these departments.

"Since 70% of resources are going in this direction maybe the effort also needs to be directed at these areas."

"There are no clean audits in that area where the bulk of expenditures are being incurred," deputy auditor-general Kimi Makwetu told parliament's Standing Committee on Public Accounts ("Scopa"). Scopa chairman Themba Godi said the auditor-general's findings were disappointing because they reflected the same problems in state departments year after year.