Page 351 - SAMRC AnnualReport 2025-26

F I NAN C IAL I N F O R MA T I O N

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
(CONTINUED)

31 MARCH 31 MARCH
2026 2025
R R
38. Irregular expenditure and Fruitless and
wasteful expenditure for the year

Irregular expenditure 3,913,587 2,898,174
Fruitless and wasteful expenditure 87,654 47,420
4,001,241 2,945,594

The 2025 Irregular expenditure amount has been restated to include transactions identified by an independent
review during the 2025/2026 financial year, previously disclosed as R217,800 now disclosed as R2,898,174.

During the period under review R173 was recovered from staff (In the 2024/2025 financial year R45,447 was
recovered from staff).

During the previous financial year, SAMRC discovered 2 transactions that were not procured in line with the
procurement legal prescripts. These transactions were identified to have been procured via a Request for Quotes
manner of procurement. SAMRC took a decision that all transactions incurred in this manner (RFQs) in the period
from April 2024 to 31 March 2025 would be subject to a review and a total of those transactions was R60.87 million.

An Independent Review of these R60.87 million transactions resulted in discovery of R2,680,374 transactions
being procured in an irregular manner for the 2024/2025 financial year. The independent review was extended
to include 9 months (01 April 2025 to 31 December 2025) of this reporting period, resulting in an identification of
R3,913,587 irregular expenditure for the 2025/2026 financial year.
Consequence management processes are currently unfolding as the disciplinary process is underway. SAMRC
has considered extending the consequence management to external service providers who are suspected of
circumventing Supply Chain Management processes and thus has served these service providers with letters
informing them of SAMRC’s intention to restrict these Service Providers from doing business with Organs of
State as per National Treasury’s SCM Instruction Note No. 3 of 2021/22. SAMRC is currently considering their
representations before reporting them to National Treasury.
During the financial year an amount of R87,654 was incurred as Fruitless and Wasteful Expenditure. Of the
R87,654, R60,000 relates to the payment of student Interns whose contracts had ended but unfortunately not
terminated fully in the payroll system, attempts are being made to recoup the amount however as these students
are currently un-employed, it is difficult to recover. The employee who allowed this error to happen is negotiating
a payment plan with SAMRC in paying back this amount.

An amount of R16,794 was incurred by SAMRC for accommodation purposes, however some employees did not
make use of the accommodation, whilst an amount of R2,050 was incurred to change the flight ticket.
Penalties of R6,322 was paid on behalf of an employee who did not renew professional membership timeously.
An amount of R2,395 was incurred in traffic fines. Interest amounting to R93 was incurred on Cashsend bank
accounts with debit balances.
An amount of R7.7 million has been spent on a research project called South African Diabetes Prevention
Programme (SA-DPP) since 2020 financial year to 31 March 2026. SA-DPP expenditure is under assessment as
a Fruitless and Wasteful Expenditure due to fabrication of results by a service provider who did not carry out
instructions to deliver blood samples to a Laboratory. The likelihood is that the results gained from this project
to date cannot be relied upon and thus all expenditure on it was incurred in vain.
Also, SAMRC is yet to determine if there was value for money gained in 2 consultancy services costing about
R411,000 that had been classified as an Irregular Expenditure in financial year ending 31 March 2025 and
31 March 2026.

SA M R C A N N U A L R EP O R T 2 0 2 5 / 2 0 2 6 349