ATC240229: Tenth Report of the Standing Committee on Public Accounts on the unauthorised expenditure of the Mineral and Energy dated 28 February 2024

Public Accounts (SCOPA)

Tenth Report of the Standing Committee on Public Accounts on the unauthorised expenditure of the Mineral and Energy dated 28 February 2024

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

1. Background:

 The Committee notes that the Department incurred unauthorised expenditure in the 2010/11 financial year by overspending the vote by R14.86 million.   

• The Department was unable to make the final transfer of the Integrated National Electrification Programme to Mthonjaneni Local Municipality in 2009/10​.
• Payment was rejected on 24 March 2010 due to the banking details of the municipality not verified​.
• Rejected again in April 2010, due to a spelling error in the name of the municipality​.
• The Department transferred funds to the municipality that were initially allocated in 2009/10 in 2010/11​.

 

2. Mitigating actions and steps taken to prevent unauthorised expenditure.

• After the rejection of payment, the Office of the Accountant General confirmed that the then Department of Minerals and Energy successfully verified the transaction on 31 March 2010.​
• Split in the Department of Minerals and Energy meant the newly created Department of Energy’s financial system and financial management structure was in a transitional state​.
•  The newly created DoE only began verifying banking details on 26 April 2010​.
• The Department could have asked for a rollover in terms of Treasury Regulation 6.4.1.​
• Internal audit mandated to investigate and verify whether proper processes were followed and found that there was non-compliance with the 2009 Division of Revenue Act and the MoA​.
• Since April 2011, the banking details have been verified by the National Treasury and the controls have since tightened. The Department has put corrective measures in place.

 

3. Recommendation

Having considered the above matter the Committee recommends that an amount of R 14.86 million should be financed as a reduction of the department’s future allocation in terms of section 34(1)(b) of the PFMA, 1999.

 

4. Conclusion

The Committee further recommends that the Auditor-General should follow up on all matters raised above and report thereon in its audit outcome on unauthorised expenditure after the end of the 2023/24 financial year.

Report to be considered.