Government waste: R1.3 trillion lost to irregular and fruitless expenditure

Government departments, entities, and municipalities have “squandered” over R1 trillion in the past five years in unauthorised, irregular, fruitless, and wasteful expenditure (UIFW).

Parliamentary replies show that government departments and entities have incurred hundreds of billions of rand in UIFW expenditure between 2019 and 2024.

Unauthorised and irregular expenditure refers to money spent without following proper procedures, while fruitless and wasteful expenditure refers to money spent in an improper manner.

The replies were to questions asked by ActionSA MP Alan Beesley. He stated that calculations show that over the past five years, the government has incurred R1.3 trillion on UIFW expenditure.

This figure does not include the activities of provincial government departments, as that information, according to the replies, is submitted directly to the Treasuries of the different provinces.

Members of Parliament have registered their unhappiness with this issue and indicated that they are worried about the trajectory of UIFW. They noted that while it showed signs of decline over the years, it has spiked again in recent years.

The National Treasury was contacted for comment but had not responded to the request.

In his questions, Beesley requested the National Treasury to provide information on the total amount reported in terms of (a) fruitless and wasteful expenditure, (b) irregular expenditure, and (c) unauthorised expenditure by (i) national departments and national public entities, (ii) provincial departments and provincial public entities, and (iii) municipalities and municipal public entities.

The questions covered the five-year period between the 2019 and 2024 financial years.

In the response, the summary of fruitless and wasteful expenditure by national departments and national public entities subjected to the PFMA showed that the departments incurred about R1.4 billion, while national entities incurred R7 billion.

Regarding irregular expenditure by national departments and national public entities, the departments incurred R38 billion, while national entities incurred R235 billion.

It was reported that unauthorised expenditure by national departments for this period was around R9.2 billion.

The report indicates that municipalities and municipal entities are squandering billions in fruitless and wasteful expenditures, with R65 billion lost in this manner.

The breakdown of the consolidated fruitless and wasteful expenditure per financial year shows that 2020 was the lowest, at R4 billion. It spiked in 2022 to 2023, where it hit an all-time high of R19 billion, before coming down in the last financial year to R17 billion.

The breakdown of the consolidated total balances of irregular expenditure shows that about R602 billion was spent during this period.

“The consolidated total balances of irregular expenditure per financial year showed that the 2019-20 financial year was the lowest at R74 billion, while the highest was the last financial year of 2023-2024 at R137 billion,” it noted.

The breakdown of the total balances of unauthorised expenditure incurred by municipalities amounted to R419 billion.

Beesley described the situation as shocking, stating, “The amount of R1.38 trillion incurred on irregular, unauthorised, and fruitless and wasteful expenditure by government departments, entities, and municipalities over the last five years is staggering and totally unacceptable.

“This shocking amount confirms what all South Africans know: good governance and accountability are simply non-existent within public departments and entities. Until public officials are held accountable for irregular, unauthorised, and fruitless and wasteful expenditure, the battle for better service delivery will not be won.”

DA MP Kingsley Wakelin, a member of the Appropriations Committee, said they are aware of the matter and are extremely concerned. He noted that trends in national government seemed to decline but have picked up again. He echoed the president's comments this week regarding municipalities.

“We want to say we are available to assist in any way in dealing with this issue. We are also calling for people to be accountable and disciplined. We call on accounting officers to be disciplined and for officials to be held accountable so there is not the circulation of officials who, if involved in alleged wrongdoing, leave KZN and show up in Mpumalanga. There should be a registrar for such officials.”