HDA Annual Report

ANNUAL REPORT 2023/24 Notes to the Annual Financial Statements

Restated 2023

Figures in R’000

2024

28. Irregular, fruitless and wasteful expenditure

Irregular expenditure

36 087

371 369

Fruitless and wasteful expenditure

742

404

36 829

371 773

Criminal or disciplinary steps taken as a result of losses, irregular and fruitless and wasteful expenditure

Incident description 2023/24 Irregular expenditure emanated from non-compliance with supply chain management prescripts. All cases were completed, and responsible officials disciplined. During the year ended March 2024, a total amount of R705,3 million of irregular expenditure that was not condoned by National Treasury, was removed by the Board on 04 March 2024 in compliance with the applicable PFMA Compliance and Reporting Framework. This amount includes R361,9 million for the prior year and R343,3 million that was incurred during 2017/18; 2020/21 and 2021/22 financial years. Fruitless and wasteful expenditure arose from the oversight in performing an administrative task. An amount of R2,9 million Fruitless and wasteful expenditure was written off during the year. This amount includes R2,8 million worth of transactions that do not constitute fruitless and wasteful expenditure as defined by the Act (PFMA), R4 thousand incurred in the current year, R67 thousand for the prior year and the rest relates to 2017/18 until 2021/22 financial years. Restatement of opening balances During the audit of 2023/24 financial year, the HDA identified fruitless and wasteful expenditure of R337 thousand relating to the prior year through its own internal processes. This additional amount was not previously disclosed in 2022/23 financial year, and it has been duly included in the amount of R404 thousand.

Impracticality Judgement No impracticality judgement identified during the current financial year.

29. Budget Comparison Statement

Changes between the approved and final budget

An increase between the approved and final budget is mainly driven by the following:

• An increase of R43,1m in conditional grants received from the provinces to fund the provinces expenditure. The KZN province increased its budget by more than R40m at mid-term to fund the KZN floods project. This increase in revenue had a corresponding effect in spending towards this project. • A higher interest income originating from high levels of cash held in the bank. Operational grant spending was slow during the first six months of the year. • A notable increase in other income of R6,2m. The Agency had utilised its operational grant funds in the prior year to pay a court award arising from a legal dispute in relation to the court settlement.

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