Page 247 - SAMRC AnnualReport 2025-26

PF M A C O M PL I A N C E R EP O R T

IRREGULAR, FRUITLESS AND WASTEFUL
EXPENDITURE AND MATERIAL LOSSES

Irregular expenditure
a) Reconciliation of irregular expenditure

2025/2026 2024/2025
DESCRIPTION R’000 R’000
Opening balance 217 –
Adjustment to opening balance 2,680 –
Opening balance as restated 2,897 –
Add: Irregular expenditure confirmed 3,914 217
Less: Irregular expenditure condoned – –
Less: Irregular expenditure not condoned and removed – –
Less: Irregular expenditure recoverable – –
Less: Irregular expenditure not recoverable and written off – –
CLOSING BALANCE 6,811 217
Reconciling notes

2025/2026 2024/2025
DESCRIPTION R’000 R’000
Irregular expenditure that was under assessment – 60,874
Irregular expenditure that relates to 2024/2025 and identified in 2025/2026 2,680 –
Irregular expenditure for the current year 3,914 217
TOTAL 6,594 61,091
During the previous financial year, SAMRC identified 2 transactions that did not adhere to procurement legal
requirements. These transactions were conducted using a Request for Quotes process. SAMRC decided that
all transactions carried out this way (RFQs) from April 2024 to 31 March 2025 would be reviewed, amounting
to a total of R60.87 million.

An Independent Review of these R60.87 million transactions revealed that R2.7 million was procured in
an irregular manner. The independent review was extended to include 9 months of this reporting period
(01 April 2025 to 31 December 2025), resulting in the discovery of R3.9 million in irregular expenditure.

Consequence management processes are currently in progress as the disciplinary procedures are underway.
SAMRC has considered extending consequence management to external service providers suspected of
bypassing Supply Chain Management processes and has served these providers with letters informing them
of SAMRC’s intention to restrict their ability to do business with Organs of State, in accordance with National
Treasury’s SCM Instruction Note No. 3 of 2021/22. SAMRC is presently reviewing their responses before
reporting them to the National Treasury.

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