KZN Health’s R4.1 billion spending black hole

Auditor-General Kimi Makwetu said he was unable to determine the full extent of the irregular expenditure in the KZN Health Department.

Durban - The KwaZulu-Natal Health Department is sitting on a R4.1 billion irregular spending black hole, and things are in such a sorry state that the auditor-general cannot fathom the full extent of what is a growing problem.

The damning findings emerged when a qualified audit of the department’s 2015-16 finances was scrutinised in the legislature on Tuesday.

MPLs heard a litany of problems and recurring excuses and explanations, prompting Maggie Govender, chairwoman of the Standing Committee on Public Accounts (Scopa), to conclude that officials perhaps thought the department was a place to “go and eat”.

“You have to stop the scourge of nonsense that is happening,” she said.

In his report, Auditor-General Kimi Makwetu found that the department had failed to disclose all irregular expenditure.

It had also failed to comply with procurement legislation because of “breakdowns” in internal control over supply chain management.

“I was unable to determine the full extent of the irregular expenditure stated at R4.1bn,” Makwetu said.

Alarmingly, the amount had increased from R3.17bn from 2014-15.

This had happened in the financial year that the chief financial officer and the acting manager for supply chain management were suspended.

Makwetu said he had been unable to obtain sufficient evidence for “commuted” overtime allowances totalling R875 million - which had expanded from R854m the previous year.

“This was because the commuted overtime worked was not supported by reliable evidence of payment of services rendered as well as contracts.“

Other findings included:

* No sufficient evidence for moveable assets valued at R2.29bn and a further R665m in “minor” assets;

* Goods and services with values of below R500 000 were procured without obtaining the required quotations;

* Contracts were awarded to and accepted from suppliers who did not have tax clearance;

* Employees of department did not declare conflict of interests in tenders awarded by the department;

* No effective steps were taken to prevent R5.12m in fruitless and wasteful expenditure; and

* No effective steps taken to prevent R147m in unauthorised expenditure.

The majority of the findings against the department recurred over the past five years.

The magnitude of the repeat findings left one lawmaker with a “terrible headache”.

“I tried to read based on information I had but I had a terrible headache, luckily there were doctors that gave me prescription,” said ANC MPL Sipho Nkosi.

“I was surprised by the number of repeat findings.

“The irregular expenditure was not disclosed (by the department),” he said.

“When I hear that millions (belonging to) our people is wasted (I ask myself) what steps are taken to deal with officials responsible for fruitless and wasteful expenditure,” he said.

ANC MPL Vusi Dube said it was depressing to come to the meeting only to be bombarded with similar findings and explanations as previous years.

DA MPL Mark Steele noted with concern that the value of overtime and irregular expenditure “got worse since 2015 as the amounts increase”.

Govender said the supply chain unit appeared to be riddled with irregularities.

“This is one area that requires extensive investigation,” she said, adding that the responsible officials should be dismissed after proper disciplinary processes.

Referring to 42 completed departmental investigations, she said: “What we need is action taken against those responsible and recover the monies.”

DA MPL Imran Keeka said: “If we are to clean up, there has to be strong consequence. What is happening is vicious cycle that will continue.”

MEC Sibongiseni Dhlomo, who did not defend his officials, agreed it could not be that every year same explanations were offered for the same things, nor was an end in sight to the problem.

“We can’t pretend matters will be addressed in the next two weeks and two month and everybody, including the A-G, know we are on top of things,” he said.

While indicating his hands were tied to a certain extent, and saying he could only do “that much”, Dhlomo insisted heads of department should deal with officials.

“The cabinet is asking why there are no consequences. Once you get things like this and don’t get consequence, it goes to a particular level,” he said.

Daily News