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The Auditor General today briefed the Portfolio Committee on Finance about Treasury’s financial performance in 2010/11.

In short, Treasury’s financial performance has worsened considerably over the past year. This needs to be taken very seriously, given that Treasury has become the benchmark for good financial management in national government.

I will be submitting parliamentary questions to the Minister of Finance to ask that he explain what will be done to rectify this situation. In addition, I will ask the Chairperson of the Portfolio Committee to summon the former Director General of Treasury, Lesetja Kganyago, who served for most of the previous financial year and who has now taken up a position at the Reserve Bank, before the committee to explain the Treasury’s poor performance.

Some of the most concerning revelations about Treasury’s financial management are:

• Treasury incurred over R11 million in irregular expenditure
• Treasury lost R3.5 million due to criminal conduct and ineffective control mechanisms in its special pensions programme
• Three forensic investigations have been launched into allegations of procurement irregularities, irregular appointment of contracts, and irregular appointment of service providers
• Treasury incurred expenditure that was not approved in accordance with the Public Finance Management Act (PFMA).

This performance is particularly troubling given that Treasury is partly responsible for enforcing financial compliance and good governance in other spheres of government.

How can this government expect its departments and entities to manage their finances appropriately if Treasury is not able to do so? The Auditor General today reported to the Standing Committee on Public Accounts (SCOPA) that wasteful expenditure by government increased by 200% in 2010/11. It seems that as Treasury’s financial standards have slipped, so too have those of the rest of government.

Questions must be asked about the Zuma administration’s ability to effectively manage our national finances. For every rand that Treasury, or any other government department or entity wastes through poor management, fewer resources are available to spend on delivering services to the South African people.

This means fewer houses, water connections, electricity connections, weaker schools and hospitals and less money to spend on infrastructure or supporting young entrepreneurs.

The good reputation of the Treasury is vital to maintaining the credibility of our country’s macro-economic management, and in enforcing financial discipline in other state entities. We must therefore do everything we can to reverse this slide, and restore the Treasury’s reputation as an example of excellent financial management.