SCOPA must probe Defence Department and Airbus A400M Deal

The Department of Defence (DOD) received its tenth successive qualified audit opinion in the 2008/2009 Financial Year.

The DoD's finances are in meltdown with over R100 million of irregular expenditure over the past financial year, and possible irregular expenditure of R2.9-billion on the procurement of the Airbus A400M.

1. Department of Defence

The Auditor-General's 2008/2009 annual report on the defence department found:

• over R100 million of irregular expenditure  - there was R118 473 000 of irregular expenditure and no supporting documentation could be provided for R77 042 781 of this expenditure;

• just under R200 million paid to consultants was unverifiable - there was no proper internal control systems or supporting documentation provided by the defence department for R193 105 851 spent on consultants;

• over R 4 million spent was fruitless and wasteful expenditure - there was R4 587 000 of fruitless and wasteful expenditure; and

• no proper asset register was maintained by the defence department.

There now appears to be a very serious question mark about the purchase of eight A400M strategic heavy lift aircraft from Airbus. The eight aircraft were scheduled to be delivered between 2010 and 2012. However, there are now serious delays and all options are being considered including possible termination of the programme.

2. Airbus A400M Arms Deal

The Auditor-General's 2008/2009 annual report on the special defence account reveals that:

• nearly R3 billion of possible irregular expenditure on the Airbus A400M aircraft programme - possible irregular expenditure of R2.9 billion may have occurred in the acquisition of the Airbus A400M aircraft as a result of the tender process.

Moreover, the Auditor-General's 2008/2009 annual report on the defence department reveals that:

• over R15 million in irregular expenditure on the Airbus A400m aircraft programme is being investigated - R15 242 000 of irregular expenditure on the A400m strategic heavy lift aircraft programme is being investigated with a view to disciplinary action or criminal proceedings.

The DA will approach Themba Godi, chairperson of the Standing Committee on Public Accounts (SCOPA) to have a special hearing on:-

• the state of financial management within the department of defence; and

• on the procurement of the Airbus A400M strategic heavy lift aircraft for the South African Airforce.

The financial meltdown in the department of defence cannot be allowed to continue.

Statement issued by David Maynier, MP, Democratic Alliance shadow minister of defence and military veterans, September 30 2009

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