Every time the Auditor-General releases a report on the state of municipalities, and their compliance with proper financial controls, a term such as “fruitless and wasteful expenditure” is bandied about.
Here’s a distillation of what those terms actually mean…
Fruitless and wasteful expenditure
Expenditure which was made in vain and would have been avoided had reasonable care been exercised.
“In vain” is defined as:
A transaction, event or condition which was undertaken without value or substance and which did not yield any desired results or outcome.
“Reasonable care” is defined as:
Applying due diligence (careful application, attentiveness, caution) to ensure that the probability of a transaction, event or condition not being achieved as planned is being managed to an acceptable level.
Irregular expenditure is expenditure other than unauthorised expenditure, incurred in contravention of or that is not in accordance with a requirement of any applicable legislation.
It also includes expenditure in contravention of, or that is not in accordance with, a requirement of the supply chain management policy, or any applicable by-laws.
Unauthorised expenditure refers to expenditure that municipalities incurred without provision having been made for it in the budget approved by the council or which does not meet the conditions of a grant.