SOEs racked up an 'alarming' R69bn in irregular expenditure, MPs told

CAPE TOWN - The Office of the Auditor-General (AG) said that state-owned entities had racked up an "alarming" R69 billion in irregular expenditure.

They're not the only culprits, with 38 government departments also incurring R50 billion in irregular expenditure over the last five years, according to the AG.

Some of the biggest offenders are SOEs like Transnet and SAA, as well as departments like defence.

The AG briefed the Standing Committee on Appropriations on Tuesday on the "perennial offending departments" in respect of irregular, wasteful and fruitless expenditure.

The Office of the Auditor-General gave the appropriations committee a list of 27 SOEs responsible for the almost R70 billion in irregular expenditure.

Bongi Ngoma, the head of audit at the AG, said that an example of irregular expenditure was how entities or departments deviated from the tender criteria from amounts to quantities.

"Irregular expenditure now for the SOEs, again the culture of non-conformance to the laws at SOEs shows an alarming picture, with SOEs and subsidiaries incurring about R69 billion of irregular expenditure over the last five years since 2018/19."

The AG said that the biggest SOE culprits were Transnet, with R35 billion worth of irregular expenditure, followed by SAA at R18 billion.

Ngoma said the story of irregular expenditure "may be dire" but there were still ways to deal with it, establishing the root cause and implementing consequence management.

"There is a law that governs what needs to be done with this irregular expenditure and the frameworks are currently governed by the National Treasury in the form of various instruction notes," said Ngoma.

Committee chairperson Mmusi Maimane said they’d already invited some "culprits" who incurred irregular and fruitless and wasteful expenditure, like the SABC and Eskom Holdings.