Tuesday, August 07, 2012

Secret spending hits R99bn


248359_10150270540786474_708791473_8862281_1316556_nfrom IOL:


The ANC government has moved twice as much through a military account that hides spending as the apartheid government did.

The Star has calculated that since 1994 about R99.695 billion has been spent through the Special Defence Account, which has a block on public access to what the spending is about.

That’s double the R49.649bn that the Auditor-General told the Truth and Reconciliation Commission had passed through the account from 1974, when the account was set up, to 1994, according to the TRC’s final report.

Nearly R14bn more is due to go into the account over the next two years, which will bring the spending for the two post-apartheid decades to more than R113bn.

Neither the Department of Defence nor the National Treasury would comment after being asked to do so. The questions The Star asked both departments included whether the account is used to buy the aircraft that the military uses to transport the president and VIPs.

Last week, The Star reported that Minister of Finance Pravin Gordhan has exempted the Special Defence Account from sections of the Public Finance Management Act (PFMA) for three years.

The National Treasury said this was so that the account won’t have to publish separate financial statements and thus disclose spending details.

The spending is routinely kept secret.

Gordhan’s exemption is partly retrospective, as it covers the financial years 2010/11 to 2012/13, and involves a total of R13bn.

The account is for buying weapons and equipment and funding covert activities, and includes the spending on the arms deal. There is no spending on staff.

In the 2007 Budget, the last year the account was run as a separate programme, the Department of Defence said it was for “special defence activities and purchases, including procuring defence main equipment and strategic armaments, operating and maintaining defence main equipment, and financing intelligence-related defence activities”.

There are two key features on the account: secrecy and rollovers. The Budgets show how much money is transferred into the account each year but not the details of what it’s for or the total actually spent. At the end of each financial year, any money left over may be rolled over to the next, unlike with other government accounts.

This year, 14 percent of the defence budget runs through the account.

Over the past few years, the Department of Defence has moved the spending from more programmes into the account, such as counter-intelligence projects in 2006 and army equipment maintenance in 2003.

The arms deal money is detailed in some budgets, but the rest is just hinted at with references to “strategic munitions”, “strategic airlift capability” or “a need to upgrade the department’s ICT infrastructure and aircraft”.

Anti-arms-deal activist and former banker Terry Crawford-Browne called Gordhan’s exemption illegal, citing the PFMA and the constitution, which both require transparency in government expenditure.

“Like his predecessor, Gordhan has no authority to flout the constitution,” he said.

“Both the TRC and the Auditor-General were clearly unhappy about continuance of these funds after 1994, and the lack of proper auditing. Yet, 14 years later, the minister of finance is still complicit in these shenanigans,” said Crawford-Browne. - The Star

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