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FINANCE PORTFOLIO COMMITTEE
18 September 2002
FINANCE BILL: VOTING
Chairperson: Ms B Hogan (ANC)
Finance Bill [B48-2002]
Unauthorised Expenditure: SCOPA resolutions; Extracts from Auditor-General Reports
After the Committee was assured that all unauthorised expenditure has subsequently been authorised by the Standing Committee on Public Accounts, the Committee accepted the Bill.
The Bill gives effect to certain resolutions of the Standing Committee on Public Accounts (SCOPA), namely that certain unauthorised expenditure by various government departments be authorised.
The Chairperson asked if there are any instances where expenditures were not authorised by the Standing Committee on Public Accounts (SCOPA) but was included in the Bill.
The National Treasury presenter, Mr Nico Marias, answered that everything in the Bill was authorised.
The Chairperson asked if there was any unauthorised expenditures that SCOPA did not include in the Bill.
Mr Marais replied that everything was included.
The Chairperson said that they have to accept that SCOPA put a lot of work into this and they have to trust their expertise.
Mr Lekgoro (ANC) asked what the primary cause of unauthorised expenditures was.
Mr Marais answered that all irregular expenditures, technically unauthorised expenditures and all other expenditures where the normal channels were not followed fall into this group. He also said that quite often during tendering processes, the correct procedures are not followed. He did add that this was not wasted money and that SCOPA does keep track of everything.
Mr Lekgoro said that it worried him that tender procedures are not followed. This could lead to fraudulent activities.
The Chairperson commented that she is satisfied that SCOPA's enquiries deal with this.
The Chairperson then asked the members to vote. Everyone agreed and the Finance Bill was accepted.
MEMORANDUM ON THE OBJECTS OF THE FINANCE BILL, 2002
1. The object of clauses 1 to 3 is to give effect to certain resolutions of the Standing
Committee on Public Accounts (SCOPA), namely that certain unauthorised expenditure
2. Since an amount equal to the unauthorised expenditure contemplated in clause 1 (as
reflected in Schedule 1) has been paid over to the National Revenue Fund in accordance
with the now repealed Treasury Instruction H2.4, these funds will be refunded to the
relevant departments as a direct charge against the National Revenue Fund.
3. In clause 2 the unauthorised expenditure is a consequence of overspending of
Votes. These cases were considered by the SCOPA and after intense deliberations were
recommended for authorisation. If the proposal to authorise is passed by Parliament, the
amounts overspent will form direct charges against the National Revenue Fund.
4. Clause 3 proposes the authorisation of unauthorised expenditure for which no
refunds will be made. The relevant expenditure was not paid into the National Revenue
Fund as was prescribed in Chapter H of the Treasury Instructions.
5. The SCOPA recommended in 1999 that it be stipulated in a validating Act that any
legal entitlement regarding the potential recovery of any losses to the State owing to the
authorisation of the unauthorised expenditure in question must remain. Although the
recommendation referred to a specific batch of unauthorised expenditure, the principle
is clear that there should not be any legal uncertainty on this issue. Clause 4 proposes to
ensure compliance with this recommendation.