Defence department overspent on salaries by R3.6bn, claims it cannot be held liable
· Citizen
The Department of Defence (DoD) has stated the billions overspent on salaries in the previous financial year were a necessity that could not be avoided.
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The DoD spent R55 billion on the compensation of employees (CoE), which was R3.6 billion over its budget allocation for salaries.
In a presentation to the Standing Committee of Appropriations on Wednesday, instead of agreeing to tighten expenditure, CFO Edem Abotsi said next year’s overspend would be R4.1 billion if National Treasury did not give the DoD more money.
“The cost per employee increases on a daily basis, on a yearly basis, based on inflationary cost of living adjustments.
“But the funding we receive doesn’t necessarily cover the full requirement of the actual feet on the ground from a compensation point of view,” said Abotsi.
Salary allocation insufficient
His presentation detailed how the over-expenditure was driven by budget limitations, not financial mismanagement or a bloated administration.
Currently, the department has 72 095 personnel, increasing to 79 349 when including the reserve force.
The DoD expect those numbers to increase to 73 980 and 81 234, respectively, by 2028, with Abotsi urging National Treasury to prepare accordingly.
The CFO confirmed the DoD took the decision to pay its personnel, regardless of the funds available.
“The current CoE allocation was insufficient to sustain the existing personnel structure, and this was further exacerbated by the actual reserve force utilisation exceeding planned man-days,” stated Abotsi.
Since the 2017-18 financial year, the DoD had recorded R10.1 billion in irregular expenditure, yet none has been recorded since 2022-23.
However, since that reporting period, losses have been recorded as unauthorised expenditure, accumulating R12.5 billion since 2022-23.
As a consolation, Abotsi did confirm that the department had saved R85 million through the withdrawal of troops from SAMIDRC missions.
Problem ‘imposed on the department’
Abotsi’s presentation concluded with a bold statement that any financial issues faced by the DoD were national government’s fault.
“No one within the DoD can be held accountable with regard to the incurrence of unauthorised expenditure as defined by the Public Finance Management Act, as these cuts and underfunding were imposed on the department by the national fiscus,” Abotsi stated.
Committee member Andrew Bateman highlighted what he believed was an “unconvincing” argument made by the CFO.
“I would have thought that following orders is a concept that is very familiar to the defence force.
“What’s absent from this presentation is any kind of justification for why the DoD cannot fulfil its legislative function within the available budget.
“Is the department saying it had the legal authority to spend R3 billion more than what parliament authorised?
“I am just trying to imagine if other departments operated on that basis, what would the implications be for the fiscus and for the functioning of government,” asked Bateman.
Abotsi argued that the number of personnel employed by the DoD should automatically be factored in when budgets are formulated.
“It’s mainly linked to the numbers; the numbers were not funded. If you have 10 people on the ground and you only have money for six, what do you do with the other four?
“They are dutifully employed; you have to find a way of remunerating them,” Abotsi concluded.
Operation Prosper funding
The CFO’s presentation touched briefly on the funding available for the 2 200 troops deployed under Operation Prosper.
Abotsi said the department had not yet received the funds and that he was being forced to “rob Peter to pay Paul” in order to cover costs.
“The concern initially was, because the Appropriation Act was not approved timeously, [National Treasury] could not assist us with this R823 million.
“Subsequently, the president assented to this specific Act on 14 July. So, we are hoping we’ll receive this R823 million immediately, because we are seriously under pressure to fund this operation.
“We have to now go take funds from other operations. Whatever funding we have planned in the second and third quarters, we have to bring those funds in to support our military personnel,” said Abotsi.
Defence minister Angie Motshekga dismissed the urgency of the CFO’s plea, saying Treasury had guaranteed the funds.
“The question of the money, for me, it’s more of a process than a technical issue.
“If, as defence, we have a written note to say we are going to get this money, in the meantime use existing funds, and as soon as the legal parliamentary process has gone through, we will compensate,” the minister stated.