Defence entities take years to address stagnant R25 billion financial waste

South Africa's Department of Defence and Military Veterans has faced accusations of ignoring billions in financial waste, according to the Auditor-General of South Africa (AG). The AG's report, presented to the portfolio committee on defence, scrutinized five entities under the department's purview: the Department of Defence (DoD), Military Veterans (DMV), Armscor, Denel, and the Castle Control Board (CCB).

These entities manage a combined budget of R63.2 billion, with almost half, or R25.9 billion, spent unlawfully, irregularly, fruitlessly, and wastefully over the past decade. Material findings of non-compliance with key legislation were found in all five entities, prompting committee members to deliver strong statements. The DoD received a qualified audit with findings, while the DoD, Armscor, and CCB received unqualified audits, and Denel received a disclaimer audit.

Denel has the worst record, with the ninth consecutive disclaimer audit due to insufficient financial information. The AG noted instances of entities ignoring outstanding financial matters, with Denel having unresolved matters between five and nine years old, and the defence department having matters older than 10 years. The financial waste has hindered the entities' core functions, with only Armscor achieving over 50% in performance targets, while Denel and CCB scored 43% and 25%, respectively.

Committee members have urged the department to establish a timeline for addressing expenditure backlogs and take decisive action, warning that these issues will come to haunt the defence sector in the future.