View Document - Parliament of South Africa

107 TUESDAY, 7 OCTOBER 2008
108
Part of the overdraft is attributed to inadequate
funding on grants handling fees,
increase in the number of personnel (staff)
and high litigation costs experienced in
KwaZulu-Natal.
In order for the Agency to operate optimally,
it became necessary that the budget be
aligned with the activities undertaken to give
effect to its mandate. The effect was the
deviation from the published ENE figures. In
this regard a request for deviation was
sought from the DSD and approval was
granted.
Irregular expenditure
Irregular expenditures are as a result of the
transactions for goods and services that did
not satisfy the requirements of Internal
Supply Chain Management processes.
An amount of R25 834 000 was condoned
by the Bid Committee and the CEO depending
on the level of authority attached to the
figure or processes.
However an amount of R5 503 000 is awaiting
condonation by the Bid Committee and
the Financial Misconduct Board of the
Agency.
Fruitless and Wasteful Expenditure
Limpopo Region — Interests charged on the
Trust Account amounting to R517 087,51.
Explanatory Notes: — That contributed to
the Trust Account incurring interests:—
The Social Assistance Grants was previously
administered by the provincial Department
of Health and Social Development in the
region as Programme 2. In 2005-06, the
Programme was administered through National
conditional grants and as such required
the opening of the bank account
which linked to what was called PMG 2 on
BAS. The PMG 2 was a set of financial
books where the transactions in relation to
the grants money were reported. The Province
was responsible for spending of this
money however National Department of
Social Development played an oversight
role as it was preparing for the establishment
of SASSA.
During this period and before, the Provincial
Department of Health and Social Development
was not charged interest on overwithdrawal
of the bank account as the
Province, since the Provincial Treasury had
an agreement with the bank ie ABSA. The
reason for this could be that the Provincial
Treasury was managing overall provincial
accounts hence departmental accounts were
not charged interest on over-withdrawn accounts
or receive interest on positive accounts.
The reasons for over-withdrawal of the bank
account for the grants were caused by
various factors which amongst others included
the following:
● Overspending in the previous financial
years.
● Over withdrawals by CPS which has
now paid back an amount of
R6,1 million after reconciliation were
performed for 2006-07 year end.
● Robberies occurred in the previous
years which at 2006-07 year end
amounted to R7 million being amount
not recovered by the provincial department
to date.
● Handling fees that were charged in the
Trust account from inception of the
account until discovered in March 2007
as SASSA was reconciling the account
from the year 2003.
● Delays in the flow of transfer of grants
money.
The factors alluded to in the paragraph
above resulted in an amount of R517 087,51
interests being charged against SASSA
books and it is reflected as wasteful and
fruitless expenditure. The detail of amount is
as follows: