Auditor-General's revised findings clear KwaZulu-Natal Education Department of R2.7 billion irregular expenditure

The KwaZulu-Natal Department of Education has been cleared of R2.7 billion in previously flagged irregular expenditure after the Auditor-General South Africa (AGSA) concluded that the contracts in question were not irregular.

The department said, “the AGSA found the submissions from the department to be rational, logical and reasonable and that they conform to the values of section 195(1) and 217(1) of the Constitution of the Republic of South Africa.”

The Mercury recently reported that the AGSA had raised concern that the department failed to act on recommendations on financial issues.

The department welcomed the revised outcome, saying it demonstrated its commitment to strengthening financial management.

“The revised outcome reflects the Department’s commitment to providing accurate information, strengthening internal controls and ensuring full compliance with applicable legislation and financial management standards,” it said.

The department added that it valued “the role of the Auditor-General as an independent oversight institution that strengthens transparency, accountability and good governance.”

According to the AGSA, the matter originated from the 2022/23 financial year audit, where a finding of irregular expenditure on two contracts was raised due to non-compliance with section 217 of the Constitution and section 38(1)(iii) of the Public Finance Management Act.

It added that the expenditure on the two contracts stood at R2.62 billion at 31 March 2025.

“The department disclosed the amount as irregular expenditure under assessment in the annual report, as provided for in National Treasury Instruction No. 4 of 2022/2023,” the AGSA said in a statement.

Following the department’s dispute of the finding and subsequent consultation with the provincial treasury, the audit team referred the matter to the AGSA’s technical audit support unit for further assessment. “This is a normal audit process when matters are technical and/or the audit team has disagreements with the auditee on matters of interpretation,” the AGSA explained.

The technical assessment ultimately found that the contracts were not irregular, and the AGSA confirmed that “the department's own assessment, in consultation with the provincial treasury, also concluded that the contracts are not irregular.”

The outcome has since been communicated to the department, although “the department’s audit report and opinion issued remain unchanged,” the AGSA said.

The AGSA emphasised its commitment to executing its constitutional mandate “in a fair and transparent manner without fear, favour or prejudice.”

But the Department of Education said it would continue tightening financial controls, improving reporting systems, and enhancing oversight mechanisms. “We remain committed to managing public resources responsibly to ensure that every rand spent contributes to the improvement of teaching and learning in our schools,” the department said.

* This story has been updated to reflect the comments of the Auditor-General South Africa

THE MERCURY