Irregular expenditure at DBE, SACE and Umalusi rises to R96.3m

Education officials appeared before Parliament to account for financial irregularities and audit findings for the 2025/26 financial year.

Irregular expenditure at three of South Africa’s key education institutions has climbed to R96.3 million, while the Department of Basic Education (DBE) has failed to spend millions allocated for school infrastructure.

The Auditor-General’s findings for the 2025/26 financial year show that irregular expenditure across the DBE, the South African Council for Educators (SACE) and Umalusi increased from R79.9 million in the previous year, despite efforts to strengthen financial controls.

During a parliamentary briefing on Tuesday, DBE officials explained why infrastructure funding had gone unspent, while Umalusi acknowledged financial compliance failures that contributed to its loss of clean audit status.

The three institutions collectively managed a budget of approximately R38.3 billion and all received unqualified audit opinions with findings.

Department explains infrastructure underspending

Responding to questions about infrastructure funding, Bongani Shabangu, the DBE’s acting deputy director-general for infrastructure, said the department had repeatedly approached National Treasury because its infrastructure allocation exceeded what it expected to spend on available projects.

“We have engaged continuously with National Treasury that the budget is going to be too much for the projects that we have as infrastructure,” he told the committee.

Shabangu said the department had proposed redirecting some of the funding towards other pressing school infrastructure needs, but Treasury raised concerns about the multi-year nature of construction projects.

An agreement was subsequently reached to ring-fence infrastructure funding for school sanitation projects in KwaZulu-Natal, the Eastern Cape and Limpopo.

“Those ring-fenced funds are specifically allocated to the three rural provinces for KwaZulu-Natal, Eastern Cape, and Limpopo,” he said.

Shabangu said the DBE would closely monitor how the funding was spent and which projects were completed.

He also addressed infrastructure underspending in KwaZulu-Natal, explaining that approximately R400 million in unspent funds was linked to an additional allocation for schools damaged by storms, which was approved late in the financial year.

“The province, with our help, managed to apply for a rollover of those funds, and those rollovers have been approved,” Shabangu said.

DBE irregular expenditure linked to contracts and procurement

The Auditor-General’s report identified irregular expenditure of R75.8 million linked to earlier infrastructure contracts.

A further R13.3 million arose from irregular procurement of training services under the Basic Education Employment Initiative and overpayments to unapproved beneficiaries.

Umalusi acknowledges financial compliance failures

Umalusi, the body responsible for quality assurance in general and further education and training, recorded R6.3 million in irregular expenditure after exceeding its approved budget.

Its chief financial officer, Hendrik van der Walt, acknowledged that the institution had submitted its financial statements late, contributing to its failure to retain a clean audit.

“It is indeed a sad day when it occurred that we had to submit our financial statements late,” Van der Walt told the committee.

He said internal challenges had delayed the submission, although he maintained that the delay had not materially affected the external audit.

Van der Walt explained that Umalusi had recorded a R3.8 million surplus, with income exceeding expenditure, but had nevertheless spent more than its approved budget allowed.

He said an adjustment budget had been submitted for ministerial approval in March. However, further changes in income and expenditure before the financial year ended resulted in the irregular expenditure finding.

“We've already put corrective steps in place to ensure that this will never happen again,” he said.

Van der Walt said Umalusi had submitted a detailed audit action plan to the minister, with corrective measures to be monitored quarterly as the institution worked towards regaining its clean audit status in 2026/27.

SACE audit highlights procurement weaknesses

SACE also received an unqualified audit opinion with findings, with the Auditor-General identifying weaknesses in procurement and contract management, revenue collection and the prevention of irregular expenditure.

According to the report, the council had failed to take effective steps to collect all money owed to it and had not complied with certain procurement requirements.

During the briefing, Tuzana Sophethe, SACE’s acting head of ethics and professional development, indicated that the institution would need to consult its chief financial officer before providing a response to the financial concerns raised.