Page 257 - SAMRC Annual Report 2023-24

FINANCIAL INFORMATION

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024
SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)

1.26 Fruitless and wasteful expenditure
Fruitless and wasteful expenditure means expenditure which was made in vain and would have been
avoided had reasonable care been exercised.

National Treasury instruction note no. 4 of 2022/2023 which was issued in terms of sections 76(2)(e) to
76(4)(a) and (c) of the PFMA (effective from 3 January 2023).

All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement
of financial performance in the year that the expenditure was incurred. The expenditure is classified in
accordance with the nature of the expense and where recovered, it is subsequently accounted for as revenue
in the statement of financial performance. The entity records the details of all alleged fruitless and wasteful
expenditure in the register; investigates the incidents and where appropriate raise a debt. Fruitless and
wasteful expenditure is reported monthly to National Treasury and quarterly to the Accounting Authority.

1.27 Irregular expenditure

Irregular expenditure as defined in section 1 of the PFMA is expenditure other than unauthorised
expenditure, incurred in contravention of or that is not in accordance with a requirement of any applicable
legislation, including –
(a) this Act; or
(b) the State Tender Board Act, 1968 (Act No. 86 of 1968), or any regulations made in terms of the Act; or
(c) any provincial legislation providing for procurement procedures in that provincial government.

National Treasury practice note no. 4 of 2008/2009 and instruction note no. 4 of 2022/2023 which was issued
in terms of sections 76(1)(b), (e) and (f), 76(2)(e) and 76(4)(a) and (c) of the PFMA requires the following:

Irregular expenditure that was incurred and identified during the current financial year and which was
condoned before year end and/or before finalisation of the financial statements is recorded appropriately
in the irregular expenditure register. In such an instance, no further action is required with the exception of
updating the note to the annual report.

Irregular expenditure that was incurred and confirmed during the current financial year is recorded in the
annual financial statements.
The Accounting Authority may condone irregular expenditure emanating from non-compliance with
sections 44 and 56 of the PFMA and in a case where an employee of an entity listed in Schedule 3A to the
PFMA, was responsible for exceeding the budget of the public entity.

Irregular expenditure that was identified and confirmed during the current financial year and which was not
condoned must be recorded appropriately in the irregular expenditure register. If liability for the irregular
expenditure can be attributed to a person, a debt account must be created if such a person is liable in
law. Immediate steps will be taken to recover the amount from the person concerned. If recovery is not
possible, the accounting authority may write off the amount as debt impairment and disclose such in the
annual report. The irregular expenditure register will be updated accordingly.

SAMRC ANNUAL REPOR T 2023-24 255