The state of North West province’s public finances is on a “downward spiral”, and its government has shown a lack of accountability and commitment to clean administration.
This is the summary given in the auditor general’s latest report on the national and provincial audit outcomes for 2016-2017, which details systemic noncompliance, wasteful expenditure, a collapse in governance and serious weaknesses in leadership in the province.
The North West provincial government’s audit outcomes have regressed over the past four years. Only 32% of the departments and public entities audited obtained financially clean audits in 2016-2017 compared with 46% in 2015-2016 and 62% in 2014-15 and 2013-2014.
No public entity achieved a financially clean opinion in 2016-2017.
The report states that the office of Premier Supra Mahumapelo, as a key monitoring and oversight department, was an area of “specific concern” because it had maintained a qualified audit outcome for the past two years with increasing irregular expenditure.
Instead of working to address the weak control environment at the departments that were audited, the provincial leadership’s response was to “contest the audit conclusions”.
Most (91%) audited departments and entities had findings against them relating to irregular expenditure and nonadherence to procurement and contract management prescripts. This resulted in irregular expenditure rising from R3‑billion in 2015 to R3.6‑billion in 2016.
“As a result of this year-on-year increase and due to irregular expenditure not being investigated, the total unresolved balance for the province was R16.5‑billion,” said the report.
Three departments were to blame for close to 60% of the irregular expenditure, with community safety and transport management accounting for R880‑million. Health’s portion amounted to R714‑million, and public works and roads had a share of R550‑million.
In 2016, the province received R7.1‑million of conditional grant funding for 16 projects. Although 95% of the allocation was spent during the year, the auditor general said it identified instances where “targets of key projects were not achieved or where work was not completed at the desired quality”.
An example of this is a local government and human settlements housing project that was delayed for more than 20 months, incurring fruitless and wasteful expenditure. Poor project management and monitoring resulted in 503 housing units being demolished and rebuilt because of quality defects, even though the contractor had been paid in full.
The report says interventions did not have much effect on curbing the lack of accountability and consequence management. Its downward slide was inevitable “until such time as the pillars of accountability and good governance are put in place”.