Cape Town - The National Treasury was on Tuesday hauled over the coals by the standing committee on public accounts (Scopa) for not submitting its 2021/22 annual report to Parliament by the September 30 deadline.
This happened when the National Treasury gave an explanation on why the annual statements were yet to be tabled after it lodged a dispute over the audit finding made by Auditor-General Tsakani Maluleke.
Speaking at a virtual meeting, Scopa chairperson Mkhuleko Hlengwa said they noted that the prescripts of law allowed the department to engage in the dispute resolution mechanism process.
“The National Treasury is held to a higher standard as a custodian of the Public Finance Management Act, a torch bearer and the one that will issue treasury notes, regulations and guidelines.
“It draws our attention when you don’t table simply because you are on a higher pedestal,” he said.
Hlengwa also said non-tabling of reports should arise from extraordinary circumstances and that they had to be rational and reasonable.
Hlengwa made the statement after EFF MP Ntombovuyo Mente complained about being lectured about the audit process when acting director-general Ismail Momoniat made a presentation on the matter.
Earlier, Momoniat did get into the details of the audit findings referred for dispute resolution with the Office of the Accountant General.
“We don’t want to pre-empt the audit process and put our views forward when clearly the AG has not commented. I don’t want to go into detail on what the disputes are.”
However, Momoniat said the issues related to change in audit methodology, how certain specific payments have been dealt with and the approach to contractual commitments like the Integrated Financial Management System (IMFS).
ANC MP Sakhumzi Somyo said the National Treasury ought to be exemplary on financial accountability. Somyo asked what came from the audit on the IFMS, whose roll-out is being delayed.
Mente said there were forensic investigations on the IMFS and some people were found to be on the wrong side amid serious allegations and transgressions.
“One of the people who was found to have transgressed attempted to apply to be an AG and was disqualified due to that finding of the forensic report,” she said, before demanding full details on the disputed audit findings.
Momoniat explained that the audit findings related to how government guarantees were treated.
“This year there was a different approach and we were alerted to it in July,” he said.
Momoniat said there were issues with reporting the appropriations to the SA Special Risk Insurance Association (Sasria) and the Government Pension Fund.
On the IMFS, he said the issue was how it was disclosed in the financial statements.
“Our view is that the AG suddenly changed methodology without notice and it gets reflected on (the) National Treasury audit opinion and audit report.”
He noted that the IFMS has dogged its financial statements as fruitless and wasteful expenditure was incurred as the department made payments for which no services were received on technical support and maintenance of the IT system.
He noted that the IFMS has dogged its financial statements as fruitless and wasteful expenditure was incurred as the department made payments for which no services were received on technical support and maintenance of the IT system.
He noted that the IFMS has been the subject of various investigations, and that there was no evidence that a cent was stolen or spent badly.
“There is a contractual agreement the government entered with Oracle and that happens every year for payment of R68 million for maintenance and support. The AG said they have not been used and therefore it is fruitless and wasteful expenditure.”
Momoniat said they were now looking at renegotiating the contract because if they did not pay, there would be an audit finding of fruitless and wasteful expenditure.
“We don’t want to send a message that we don’t want to honour it,” he said.
Finance Minister Enoch Godongwana undertook to resolve the impasse over the IFMS, involving three departments.
“I will make sure that before the end of the financial year that the impasse is resolved,” Godongwana said.
Hlengwa said the IMFS had been continuing since the fifth Parliament.
“It is the greatest indictment, if not greatest failure of implementation in the financial management space of this country and it is bleeding the fiscus.”
Cape Times