Systematic weaknesses, weak IT governance and poor decision-making have led to the deterioration of financial management across Gauteng provincial departments and agencies, says the Department of Economic Development.
Following an unfavourable report by the auditor-general on several Gauteng agencies and departments, economic development MEC Firoz Cachalia says poor controls in the IT and financial environment of agencies had led to poor decision-making.
The auditor-general previously slammed the state of affairs at Gauteng agency Blue IQ in its report, revealing irregularities and financial transgressions in the agency's technology holdings.
According to the report, spending at the Blue Umbrella project - the Gauteng broadband infrastructure development initiative - had not followed the required supply chain management processes and had not been based on approved budgets.
The report also implicated Blue Catalyst, which focuses on funding innovation and developing commercial opportunities in Gauteng. The report revealed irregular expenses relating to claims from a former Blue Catalyst CEO.
The report uncovers improper expenses incurred by the former CEO, related to travel and other business payments. The report also revealed a R5 million guarantee was issued in contravention of the Public Finance Management Act and that a forensic investigation was under way.
Reprioritising
Following the report, Cachalia announced several corrective measures, including a dedicated supply chain manager to ensure strict compliance to supply chain management policy. He also said action has been taken against senior managers who were responsible for the contraventions, and attempts were being made to recover the money spent.
While no formal plans have been laid out, Cachalia said the priority would be on changing, renewing and tightening IT systems and processes. He added that several Gauteng provinces had already taken a number of measures to improve government efficiency.
One department was provincial health and social development, headed by MEC Qedani Mahlangu.
The department's audit findings for the financial year 2008 and 2009 found unauthorised spending of over R1 billion, irregular spending of R1.9 million, and fruitless and wasteful spending of R2.2 million. Mahlangu said she hoped her department would have clean audits by 2011 and 2012.
The department previously announced it would reprioritise its spending. The R609 million smart card project will remain on hold indefinitely, pending a review of all department projects and major contracts. The project will only be continued if the assessment rules it is in line with the department's mandate.
Mahlangu said the department was looking at developing a dashboard for audit requests. An audit steering committee would be set up and training sessions on using current systems would be held.
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