Health department cannot account for more than R118m.

A GAUTENG government audit has found that provincial departments could not account for R180m spent between April 1 2006 and December 31 last year.

The investigation was conducted by Gauteng Audit Services (GAS) in 12 departments to evaluate the systems and controls in respect of the management of the budgeting and monitoring processes.

The internal audit report shows the health department was the biggest offender as it cannot account for more than R118m.

The public transport, roads and works department cannot account for R18,5m; sport, arts, culture and recreation R9,4m; economic development R6,9m; community safety R1,9m; housing R929202; and local government R414110.

The audit found that in 75% of departments and two entities actual expenditure was 2% more than projected expenditure. In 57% of departments in-year monitoring reports were approved and submitted after the due date. Half the assessed departments incurred expenses that were not budgeted for.

The audit found the reason for such expenditure was often that employees’ compensation was incorrectly linked to the basic accounting system and the Persal state payroll system.

This was caused by outstanding commitments that did not take place in the planned month, the basic accounting system being unavailable, delays in procurement and payment, departments using the cash basis of accounting , or payments not being captured in time by the Gauteng Shared Services Centre .

Incorrect objective and responsibility codes were used in processing expenditure, resulting in misallocation of funds. New segment codes were created, resulting in expenses incurred being posted to the new codes by the Gauteng Shared Services Centre instead of the current ones. The basic accounting system budget- expenditure report was inadequately reviewed for identification of exceptions and there were capacity constraints and lack of appropriate skills for financial management.

The report said such expenditure would result in overspending and noncompliance with the Public Finance Management Act. This could also lead to misallocation of expenses, and service delivery targets not being met.