DA demands answers from Mpumalanga premier following shocking AG report on supply chain management

Issued by Bosman Grobler MPL – DA Spokesperson on Finance & Economic Development
18 Feb 2021 in Press Releases

The DA will ask urgent questions to the Premier following a damning report by the Auditor General (AG) that 82% of Government Departments, including some Parastatals, do not comply with supply chain management legislation. This has led to nearly R2.5 billion of irregular expenditure.

While briefing members of the Mpumalanga Provincial Legislature on Wednesday on the provincial audit outcomes for the 2019/2020 financial year, the AG said that 82% of the auditees in the Province did not comply with supply chain management legislation, and a further 75% did not comply with key legislation.

This revelation is concerning to the DA taking into consideration that over the past couple of years, one of the most contentious issues for Mpumalanga Province has always been compliance with supply chain management legislation and other key legislation. Despite being reported on in subsequent audits, little is being done by the Provincial Government to improve on this aspect.

In the report, the AG reiterated that:

• Five of the auditees received qualified audits with no findings. The Provincial Legislature improved to receive a qualified audit.

• Ten of the auditees received unqualified audits with findings.

• Six of the auditees received qualified audits with findings, and the Department of Social Development regressed.

• The Mpumalanga Regional Training Trust (MRTT) consolidation regressed to a disclaimer.

Due to the abovementioned non-compliance with supply chain management legislation, the province incurred R2 494 166 836 (nearly R2.5 billion) in irregular expenditure for the 2019/2020 financial year. The biggest contributors of this amount were:

1. The Department of Human Settlements at R997 176 000 2. Community Safety, Security and Liaison at R689 334 000 3. The Department of Education at R251 246 000.

The AG also said that for the 2019/2020 financial year, the province also incurred R9.9 million in fruitless and wasteful expenditure. It is extremely worrisome that half of this amount (R4.9 million) was as a result of interest on late payments.

In addition to the above, the closing balances for irregular expenditure decreased to R11.3 billion from the previous financial year, whereas the closing balance on unauthorized expenditure increased to R994 million and the closing balance of fruitless and wasteful expenditure increased to R43 million.

Given the above, the DA will write to the Premier, Refilwe Mtshweni Tsipane, in order to ascertain how her provincial government will improve compliance to supply chain management legislation and other key legislation – to improve on the audit outcomes and subsequently decrease the irregular, fruitless, wasteful and unauthorized expenditures.