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The Office of the Public Protector failed to report on its financial statements in compliance with the Public Finance Management Act (PFMA), among other things.
In addition, there were material misstatements, it posted irregular expenditure and its liabilities exceeded its assets.
This was revealed in its annual report for the 2017/18 financial year, which Public Protector Busisiwe Mkhwebane presented to the Portfolio Committee on Justice and Correctional Services on Thursday.
The Auditor-General (AG) found that a "material uncertainty exists that may cast significant doubt on the constitutional institution's ability to continue as a going concern", because it incurred a deficit of close to R18m during the financial year, and its liabilities exceeded its total assets by almost R26m.
The AG also found that:
- effective and appropriate steps were not taken to prevent irregular expenditure of R19.9m;
- effective steps were not taken to prevent fruitless and wasteful expenditure of R1.48m;
- some payments were not made within 30 days or the agreed period after the receipt of invoices;
- some of the goods and services, valued at less than R500 000, were procured without obtaining the quotations that Treasury regulations require;
- some contracts were extended or modified without the approval of a properly delegated official as required by the PFMA and Treasury regulations;
- some of the goods and services valued more than R500 000 were procured without inviting competitive bids;
- the financial statements submitted for auditing were not prepared in accordance with the PFMA's prescripts; and
- there were material misstatements of liabilities and disclosure items.
MPs serving on the committee were not impressed.
"You said you will be a new broom, sweeping clean," DA MP Glynnis Breytenbach said
"All of this will have a ripple effect that the public will lose confidence in the office," DA MP Werner Horn added.
ACDP MP Steve Swart pointed out that it was incumbent on the Public Protector to ensure there was full compliance with the PFMA. While the irregular expenditure wasn't a big figure, compared to some other entities, "it's the principle of the matter", he said.
ANC MP Vincent Smith commented that it seemed the office's internal audit unit "isn't up to scratch".
Chairperson of the committee, Madipoane Mothapo, was equally unimpressed and pointed out: "You are an integrity institution. You should lead by example."
Mkhwebane agreed: "Being an institution of integrity, we should lead by example."
"It is a concern indeed – full compliance with the PFMA and the matter of a going concern."
Referring to the irregular expenditure, she said only about R1m stemmed from her term and it was caused by a former CFO who incorrectly signed off on a building.
On the matter of the organisation's technical bankruptcy, CEO Vussy Mahlangu said: "It is not an ideal situation."
He said the government's budget process ensured that they would be funded going forward. It compromises investigations, he added.
As has become the norm at meetings about the Public Protector's budget, Mkhwebane raised that the organisation was underfunded. In the year under review, their budget was about R302m.
"This is a constitutional institution. They should fund it properly," Mkhwebane said.
She said the Constitutional Court ruling that the Public Protector's findings were binding until set aside by a court, led to a spike in the number of judicial review applications.
"This exhausts our already meagre litigation budget to the point that we often have to pick and choose as to which matters to defend."
She said it seemed that taking the matter on review was just a delaying tactic.
