financial misconduct presented by cox mokgoro – finance stabilisation 01 august 2013
DESCRIPTION
DPW & PMTE FRUITLESS AND WASTEFUL EXPENDITURE – 31 MARCH 2013 FRUITLESS AND WASTEFUL EXPENDITURE DPWPMTETOTAL 2012/13 R’000 Opening balance Fruitless and wasteful expenditure – relating to prior year Fruitless and wasteful expenditure – relating to current year Less: Amounts condoned --14 Less: Amounts transferred to receivables for recovery - - TOTAL FRUITLESS AND WASTEFUL EXPENDITURE – 31 MARCHTRANSCRIPT
FINANCIAL MISCONDUCT
Presented
byCox Mokgoro – Finance Stabilisation
01 August 2013
IRREGULAR EXPENDITURE DPW PMTE TOTAL
2012/13 2012/13 2012/13
R’000 R’000 R’000
Opening balance 171 643 1 410 817 1 582 460 Add: Irregular expenditure – relating to prior year
442 792 33 470 476 262 Add: Irregular expenditure – relating to current year
431 722 1 163 906 1 595 628 Less: Amounts condoned -947 - -947 Less: Amounts recoverable (not condoned) - - - Less: Amounts not recoverable (not condoned)
- - - Irregular expenditure awaiting condonation 1 045 210 2 608 193 3 653 403
DPW & PMTE IRREGULAR EXPENDITURE – 31 MARCH 2013
DPW & PMTE FRUITLESS AND WASTEFUL EXPENDITURE – 31 MARCH 2013
FRUITLESS AND WASTEFUL EXPENDITUREDPW PMTE TOTAL
2012/13 2012/13 2012/13
R’000 R’000 R’000Opening balance 69 269 239 311 308 580Fruitless and wasteful expenditure – relating to prior year
50 505 50 505
Fruitless and wasteful expenditure – relating to current year
4 313 15 217 19 530
Less: Amounts condoned - -14 -14Less: Amounts transferred to receivables for recovery
- -
TOTAL FRUITLESS AND WASTEFUL EXPENDITURE – 31 MARCH 2013
124 087 254 514 378 601
4
PMTE CLASSIFICATION AND ANALYSIS OF FRUITLESS EXPENDITURE PER AMOUNT AS AT 31 MARCH 2013
Threshold Amount % Number of Trans
R0 - R500 000 44 983 345 18 1 251
R500 001 - R1 000 000 16 106 434 6 26
R1 000 001 - R5 000 000 16 679 511 7 6
R5 000 001 - R20 000 000 56 231 257 22 4
R20 000 000 > 120 527 583 47 2
TOTAL AT 31 MARCH 2013 254 528 132 100 1 289
5
DPW CLASSIFICATION AND ANALYSIS OF FRUITLESS EXPENDITURE PER AMOUNT AS AT 31 MARCH 2013
Threshold Amount % Number of
Transactions
R0 - R500 000 2 240 934 2 145
R500 001 - R1 000 000 1 374 020 1 2
R1 000 001 - R5 000 000 11 280 067 9 6
R20 000 000 > 109 192 575 88 2
TOTAL AT 31 MARCH 2013 124 087 597 100 155
6
PMTE CLASSIFICATION AND ANALYSIS OF IRREGULAR EXPENDITURE PER AMOUNT AS AT 31 MARCH 2013
Threshold Amount % Number of
Transactions
R0 - R500 000 782 523 394 30 15 458
R500 001 - R1 000 000 226 989 110 9 320
R1 000 001 - R5 000 000 499 392 143 19 268
R5 000 001 - R20 000 000 478 332 354 18 50
R20 000 000 > 620 963 132 24 14
TOTAL AT 31 MARCH 2013 2 608 200 134 100 16 110
7
DPW CLASSIFICATION AND ANALYSIS OF IRREGULAR EXPENDITURE PER AMOUNT AS AT 31 MARCH 2013
Threshold Amount % Number of Trans
R0 - R500 000 317 031 338 30 40164
R500 001 - R1 000 000 112 440 987 11 167
R1 000 001 - R5 000 000 217 183 098 21 105
R5 000 001 - R20 000 000 241 106 884 23 28
R20 000 000 > 157 458 229 15 4
TOTAL 31 March 2013 1 045 220 539 100 40 468
ANALYSIS OF IE PER INCIDENT AS AT 31 MARCH 2012 & 13 - DPW
INCIDENT AMOUNT %NO OF
TRANSACTIONSDELEGATIONS NOT FOLLOWED 106 920 7% 2FINANCE LEASE EXTENDED WITHOUT NATIONAL TREASURY'S APPROVAL 10 858 557 3% 30OVERTIME - APPROVAL GRANTED AFTER WORK COMMENCED 111 902 0% 41PETTY CASH IN EXCESS OF R2000 82 599 14% 6SCM PROCESSES NOT FOLLOWED 670 959 539 0% 39 630SITA - TRANSACTION NO IN LINE WITH SITA ENGAGEMENT MODEL 28 226 711 0% 88SIU INVESTIGATION 135 606 619 0% 424TAX CLEARANCE CERTIFICATE NOT ON FILE 7 224 614 74% 207TRANSFER PAYMENT NOT APPROVED BY NATIONAL TREASURY 17 066 000 0% 2TRANSFER PAYMENT NOT INTO PRIMARY BANK ACCOUNT 174 977 080 1% 3831 March 2013 1 045 220 539 40 468
Row Labels TOTAL F&WENO OF TRANS FOR DC
NO OF TRANS UNDER
INVESTIGATION
NO OF TRANS FOR RECEIVABLE
AMOUNT IN EXCESS OF APPROVED/AUTHORISED BID AMOUNT 4 050 1 Departmental asset used by an Official who resigned 72 1 IMPLEMENTATION OF SAAS IT SYSTEM 48 724 903 9 INTEREST PAID ON OVERDUE ACCOUNT 169 858 11 NO SHOW FEE 889 1 OVERPAYMENT ON STIPEND 94 112 1 45 TRAINING NOT ATTENDED 87 159 1 EXPENSIVE ITEM PROCURED 6 723 1 LEVY FEE ON CANCELLED ARBITRATION 1 850 1 PROCUREMENT OUTSIDE RT CONTRACT - DIFFERENCE IN AMOUNT 8 900 1
SIU - CANCELLATION OF CONTRACT - SKILPADHEK BOARDER POST 68 818 208
1 LEGAL COSTS FOR LATE PAYMENT 5 000 1 DEPARTMENTAL ASSET USED BY OFFICIAL WHO RESIGNED 181 3
DPW - ANALYSIS OF FRUITLESS & WASTEFUL EXPENDITURE AS AT 31 MARCH 2013
DPW - ANALYSIS OF FRUITLESS & WASTEFUL EXPENDITURE AS AT 31 MARCH 2013 CONT…
Row Labels TOTAL F&WENO OF
TRANS FOR DC
NO OF TRANS UNDER
INVESTIGATION
NO OF TRANS FOR
RECEIVABLE
CATERING FOR PEOPLE WHO DID NOT ATTEND 173 483 1 ADDITIONAL AMOUNT INCURRED IN PRINTING ANNUAL REPORT 89 177 1 NO STAMP ON INVOICE CERTIFYING THAT GOODS/SERVICES WERE DELIVERED AS PER CONTRACT 121 018 23 VALIDITY OF QUOTES EXPIRED AND ORDER PLACED AGAINST EXPENSIVE QUOTE 19 870 5 VAT CHARGED BY A NON-VAT VENDOR 32 404 26 TRAVEL COSTS ON PEOPLE WHO DID NOT TRAVEL 1 188 1
SIU - PROCUREMENT OUSTIDE MINISTERIAL HANDBOOK 98 681 5
PROCUREMENT ON LOST PETROL CARD 93 544 1
SIU - PROCUREMENT FROM MIDDLEMEN 362 554 4 7
SIU - DIFFERENCE BETWEEN APPOINTED BIDDER AND ONE THAT SHOULD HAVE BEEN APPOINTED 3 475 381
2
SIU - AMOUNT IN EXCESS OF APPROVED/AUTHORISED BID AMOUNT 1 661 440
4
PURCHASE OUTSIDE THE MINISTERIAL HANDBOOK 36 954 1
Grand Total 124 087 598 16
97
1
11
PMTE – ANALYSIS OF IE PER CATEGORY AS AT 31 MARCH 2013
Incident Description Amount % Number of Transactions
DELEGATIONS NOT FOLLOWED 104 038 529 4% 1 185
FACILITY MANAGEMENT FOUND TO BE IRREGULAR
77 976 974 3% 518
INTEREST NOT DECLARED BY EMPLOYEE 1 262 202 0% 17
LEASING 586 557 182 22% 2 228
LIMITATION OF SCOPE 112 102 832 4% 23
MAINTENANCE CONTRACT - INVESTIGATION 8 561 607 0% 1
ROOSTER CONSULTANT APPOINTMENT 24 722 408 1% 36
SCM PROCESSES NOT FOLLOWED 1 535 647 475 59% 11 854
SIU - LEASE TRANSACTIONS 8 490 594 0% 39
TCC NOT ATTACHED 148 840 333 6% 209
Total 31 March 2013 2 608 200 135 100 16110
12
PMTE FRUITLESS & WASTEFUL EXPENDITURE AS AT 31 MARCH 2013
Incident Description Amount % Number of
Transactions
Interest paid on overdue account 4 101 495 2 113
Rental on Unoccupied buildings 239 854 813 94 735
VAT by non-VAT vendors 4 902 790 2 24
Settlement of contract and legal fees 501 170 0 4
Overpayment to Suppliers 885 217 0 21
Excess markup charged 2 176 770 1 511
Other avoidable expenses 2 105 877 1 24
Total 31 March 2013 254 528 132 100% 1 432
Level of Financial Misconduct Transactions
DPW PMTE TOTAL
Financial Year No of transactions
Amount No of transactions
Amount Total No of trans
Total Amount
2009/2010 271 49910 972 474 579
145 55712 110 490 147
417 056 23 082 964 726
2010/2011 275 23916 171 038 370
153 64112 801 371 414
428 880 28 972 409 784
2011/2012 261 53717 191 500 208
110 50211 210 010 514
372 039 28 401 510 722
2012/2013 122 14916 532 229 417
122 149 16 532 229 417
TOTAL Trans. 930 424 60 867 242 574 409 700 36 121 872 075 1 340 124 96 989 114 649
Irregular Exp. 40 468 1 045 210 16 110 2 608 200 134 56 578 2 609 245 344
No. of trans.
F & W E 155 124 087 598 1 289 254 528 132 1 431 378 615 730
No. of trans.
TOTAL 40 623 125 132 808 17 399 2 862 728 266 58 009 2 987 861 074
Action plan on Irregular Expenditure
ACTION PLAN ON IRREGULAR EXPNDITURE - 2012/2013
No. Action Target Date Progress
1Review all transactions for financial year 2012/2013 15 May 2013 Done
2Issue circular on immediate cut of IE 01 April 2013 Done
3New SCM database to be operational Sept 2013 In progress
4Approval of Policy on Financial Misconduct 30 Aug 2013 Served before DBC & EXCO
5Review all disclosed IE in line with guide from National Treasury From Sept 2013 In progress
6Complete the analysis of IE March 2014
7Allocate irregular expenditure to responsible official From April 2014
8Establish the Investigative capacity to investigate cases reported 30 Apr 2014 In progress
Action plan on Irregular Expenditure cont.…
ACTION PLAN ON IRREGULAR EXPNDITURE - 2012/2013
No. Action Target Date Progress9 Establish a Condonment Committee Sept 2013 Once policy is
approved10Formulate a combined condonment framework Oct 2013 In progress
11Request approval to condone investigated and finalised cases/transactions
From Apr 2014 Once policy is approved
ACTION PLAN ON NEW CASES REPORTED/IDENTIFIED FROM FINANCIAL YEAR 2013/14
1Validate all new reported cases/transactions of IE Monthly 30 days after reported
2Investigate all new reported cases within 30 days of validated Monthly Cases to be finalised within
three (3) months
3Intensify training on IE in the Department From Sept 2013 Will resume once policy approved
• All reported and validated cases of IE are reported to National Treasury monthly;
• Analysis of all reported cases and valid if indeed IE;• Refer cases/transactions for investigate all reported to Branch
Heads/Regional Managers;• Accountability lies with Branch Heads and Regional Managers;• Investigated cases/transactions referred to Condonment Committee for
approval and condonment;• Refer case to Financial Accounting to open debt account against officials, if
liable in law;• Take disciplinary actions against officials found liable;• New transactions of IE must be finalised within 3 months;• Condonment is not a given – compelling reasons should exist for it to be
granted;
Process of Clearing Irregular Expenditure reported
THANK YOU