ATC160209: Third Report of the Committee on Public Accounts on the unauthorized expenditure of the Department of Transport dated 03 February 2016

Public Accounts (SCOPA)

Third Report of the Committee on Public Accounts on the unauthorized expenditure of the Department of Transport dated 03 February 2016
 

Background

The Committee on Public Accounts (the Committee) considered and heard evidence on the unauthorised expenditure of the Department of Transport (the Department) in relation to previous years and reports as follows:

 

The Committee considered evidence from the Department relating to the following incident of unauthorised expenditure that arose owing to contravention of the Public Finance Management Act and Treasury Regulations.

 

An expenditure totalling R1 207 374 000. 00 incurred during 2008/09-2009/10 financial years was regarded as unauthorised expenditure in terms of the Public Finance Management Act, 1999 (PFMA).

 

Unauthorised expenditure occurred due to the Accounting Officer not taking effective steps as required in Section 38 of the PFMA to prevent over-expenditure though the shifting funds towards the relevant programme and implementing remedial policy decisions taken, inter alia, replace ticket-based contracts with negotiated and tendered contracts.

 

After legal action against the state by bus operators in 2009, the Department was ordered by the court to pay outstanding invoices:

 

a)     In 2008/09 the Department of Transport overspent on bus subsidies and incurred unauthorised expenditure of R844.98 million in programme 6: Public Transport.

 

b)    During 2009/10 the Department overspent on bus subsidies and incurred unauthorised expenditure amounting to R362.394 million, also in the Public Transport programme.

 

The Accounting Officer confirmed that:

1. Services for the expenditure was received to the satisfaction of the Department;
2. No individual benefited unduly from such expenditure, and
3. Control measures are now in place to prevent this from recurring.

 

Recommendation

 

Having considered the evidence and the steps taken by the Accounting Officer to prevent similar cases of unauthorized expenditure from re-occurring, the Committee recommends the approval of the amount of R1 207 374 000. 00 by Parliament as a direct charge against the National Revenue Fund.

 

Report to be considered