"This was not prevented or detected in terms of Treasury Regulation 9.1.1 by the accounting officer and has not been disclosed as fruitless and wasteful expenditure in a note to the financial statements as required by Treasury Regulation 9.1.5," wrote the AG.

This and similar errors resulted in him being unable to verify the accuracy of the cash flow statement. The AG noted that payment controls were "generally ineffective" due to inappropriate delegation and lack of monitoring. "The consequence of this was irregular expenditure being incurred in the amount of R17.785 million and entities receiving transfer payments while they had not fulfilled the transfer payment conditions."

In its human resources report, the department noted that of the 193 disciplinary hearings held during the year, 42 (21.7 percent) related to "unauthorised absence/abscondment".

More than 30 hearings each were held related to "aiding and abetting, and corruption", "fraud/false statement" and "dereliction of duty".

Of the disciplinary hearings finalised, the majority, 58, resulted in dismissal. Fifty-three cases resulted a final written warning.

According to the financial statements, the department spent R2.3 million on entertainment in 2006/07, compared to R672,000 in 2005/06. Advertising spend rocketed from R6.9 million to R16.7 million. Foreign travel expenses shot up from R2.8 million to R23.5 million.

In his foreword director general Mavuso Msimang, who joined the department after the period under review, acknowledged a number of "very serious systemic and management problems". These were being dealt with through improved planning and management, more resources in "critical areas" and a turn around project.