The Department of Correctional Services has blamed budget cuts for incurring unauthorised expenditure totalling R677 million in its annual financial statements for the 2024/25 financial year.

This comes after Auditor-General Tsakani Maluleke found that effective and appropriate steps were not taken to prevent unauthorised expenditure amounting to R677,192,000, up from R614m recorded in 2023/24.

“The unauthorised expenditure was mainly due to overspending as a result of municipal services inflation adjustment and maintenance of infrastructure,” Maluleke said.

She also found that effective and appropriate steps were not taken to prevent irregular expenditure amounting to R7.7m.

“This was mainly due to non-compliance with procurement regulations.”

In her report tabled in Parliament, the A-G found that a contract was awarded to bidders based on evaluation adjudication criteria that differed from those stipulated in the original invitation for bidding as required by Treasury regulation.

“This non-compliance was identified in the procurement processes for the panel appointed to provide perishables and non-perishables to the department.”

Maluleke observed that the irregularities were due to the management not adequately reviewing and monitoring compliance with applicable laws and regulations.

In yet another audit finding, she found the department wanting in complying with the legislated requirement for payments of invoices to service providers within a period not exceeding 30 days.

“The amount of R368,393,000 was not yet paid as at March 31, 2025.”

The department, which obtained an unqualified audit opinion with reduced audit outcomes, explained that the R368m was accruals of services rendered by organs of state where services were rendered but invoices were received after year-end.

“Material amounts of accruals are mainly municipal charges and custodial services which were paid after year-end.”

Replying to Maluleke’s audit findings, Minister Pieter Groenewald noted that she raised findings on the non-compliance in the procurement processes.

“The department did not agree with some findings, specifically on perishable and non-perishable items; this will be addressed further with the National Treasury.

“The department has implemented internal controls to prevent unauthorised expenditure by writing letters to the National Treasury indicating that services cannot be rendered with the allocated budget; however, additional funds were not allocated,” Groenewald said.

He blamed the audit finding on the department’s failure to pay service providers within 30 days, due to challenges with the payment system and budget cuts that have negatively impacted the cash flow of the department.

Groenewald argued that the R7.7 million irregular expenditure has been reduced significantly from the previous financial years.

National Commissioner Makgothi Thobakgale somehow downplayed Maluleke’s findings, saying there were no material findings on the submitted financial statements.

“The Auditor-General of South Africa (AGSA) did not identify any significant internal control deficiencies in the financial record keeping and the financial statement preparation and related business processes,” he said.

On the unauthorised expenditure, Thobakgale said he has put internal controls in place to prevent unauthorised expenditure.

“As mentioned in the Audit Report, by writing letters to the National Treasury indicating that the department, based on the services to be rendered, cannot operate within the allocated budget to which no additional funds were provided.”

He also said the unauthorised expenditure has been disclosed.

“The unauthorised expenditure is currently under investigation.”

Thobakgale defended the department’s non-compliance with paying service providers within 30 days.

“This was mainly as a result of budget cuts that negatively impacted the cash flow of the department.”

Taking a cue from Groenewald, he insisted that there were no material increases in irregular, fruitless, and wasteful expenditure because the department continuously reviewed payment transactions.

“As a result, there has been a significant reduction in the occurrence of such cases,” Thobakgale said.

mayibongwe.maqhina@inl.co.za

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