R97 million unauthorised expenditure

Unauthorised Expenditure by the Department of Home Affairs: National Treasury briefing to the

Standing Committee on Public Accounts

Date of Meeting: 17 Aug 2011

Chairperson: Mr T Godi (APC)

Summary: 

The National Treasury told the Standing Committee that unauthorised expenditure by the Department of Home Affairs amounted to R97 million. Expenditure was related to the conversion of a manual fingerprint database to electronic, and funds earmarked for capital expenditure used for current expenditure. The Treasury recommended that the amount be recovered from the baseline.

Members expressed displeasure with the long delay in bringing matters to book, seeing that the year in question was 2005/06. It was felt that individuals responsible for unauthorised expenditure had to be called to account and acted against. The Department was asked if the fingerprint project had produced value for money, to which it replied that it would grant national access to all security agencies.

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Minutes: 

National Treasury on unauthorised expenditure in the Department of Home Affairs

Mr Devan Naido , Chief Deirector: Economic Services from National Treasury told the Committee that the total unauthorised expenditure by the Department of Home Affairs (DHA) stood at R97 million. Overexpenditure during the 2005/06 financial year, amounted to R52 million. An informcation and communications technology (ICT) project had been launched in the last quarter of that finance year. The Treasury had been interested to know the reasons for that. An amount of R4.6 million, earmarked for capital expenditure, had been used for current expenditure. The Department had declared that there were measures in place to prevent recurrence, but steps against a specific person responsible were considered. The Treasury recommended that the amount be recovered from the baseline.

Discussion

The Chairperson remarked that accountability was departmental.

Ms A Dreyer (DA) asked who the Director-General of Home Affairs had been at the time. Consequences had to be considered and actions taken against persons who had to be held to account.

Mr Issac Mabena, Deirector: Administrative Services from the Department of Home Affairs answered that it had been Ambassador Mzuvukile Maqethuka.

Ms Dreyer proposed that he be called in to answer.

Mr N Singh (IFP) remarked on the long time lapse that had occurred before matters were brought to book. The unauthorised expenditure by Home Affairs dated back to 2005/06. He asked why it had taken so long to bring the matter before the Committee. The person responsible in one instance may have disappeared or gone underground.

The Treasury replied that the danger of unauthorised expenditure had been consistently highlighted by it. The Department had neglected to write a letter to it about problems experienced. Engagement with the Treasury about facts was necessarily time-consuming.

The Chairperson remarked that the call had to go out to departments to act with speed, where unauthorised expenditure was concerned. If there was procrastination, the Treasury could not act.

Ms M Mangena (ANC) referred to the amount of R53 million, and asked what had happened. With reference to the DA proposal, she said that the DHA could have made an offer for R46 million to be recovered. She asked what had to be done to recover that amount.

Mr Mkuseli Apleni, the Director-General (DG) of Home Affairs, replied that the Department had allocated R92 million in 2004/05 for the back record conversion project. Service providers had been appointed. The project was initiated to establish an electronic fingerprint record of everyone in the country. Little work was performed during 2004/05, with work only commencing in March. The DHA was unable to spend the R92 million. R389 million was saved in that year. The Department submitted a rollover request. The contract was signed in September 2004. Judgement estimates were decided in October. R132 million was required for the project. In August 2005, the Treasury approved R97 million out of the R389 million saved, to be reserved. The amount was granted on condition that it be allocated in the Department if spending trends were to tend towards overspending. The Department eventually spent R226 million on the project. The baseline amount came to R132 million. Money was being placed outside of the process. R51 million was reserved. There was overspending on goods and services. R46 million was allocated to capital expenditure. Money was taken for licences. Licences were not software, but in that case it was interpreted as being so. Software was part of capital expenditure. The Auditor General found that to be wrong. Overspending may have been wrong, but the DHA did approach the Treasury for a rollover of funds, which was approved. R389 million was returned to the fiscal. The R97 million reserved for the Department, was not requested at the right time. No access to the R97 million would have a major impact, seeing that Home Affairs had not yet turned the corner as a department. The Committee was asked to consider condoning the expenditure.

Ms M Matladi (UCDP) pointed out that there was a difference between saving and underspending. If an amount was budgeted for service delivery and a department failed, it was not a saving. The DHA had admitted that it had been wrong not to go back to the Treasury about the matter. She asked what had been done to correct the situation.

The DG responded that the way to correct the matter was first to acknowledge the problem. A letter had to be written to Treasury.

Ms T Chiloane (ANC) asked about value for money for the project undertaken.

The DG responded that Home Affairs was the custodian of fingerprints. The change from a manual fingerprint record to an electronic one, meant that access to fingerprints for the police and others, had been established. The Department was proud of that achievement.

Ms G Saal (ANC) said that overspending was better than underspending. She asked for reasons why there had been the delay to report back about the promised money.

Mr Singh opined that it had been up to the Treasury to pick up the error. He was not in favour of condoning the expenditure. There had to be efforts to see how much could be made up by other means. It could be staggered, if necessary.

The Chairperson reminded the Committee that no decisions needed to be reached on that day.

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The Chairperson adjourned the meeting.

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