Irregular expenditures in three key South African educational institutions reached R96.3 million. Furthermore, the Department of Basic Education (DBE) was unable to spend millions allocated for school infrastructure.
According to the Auditor-General's report for the 2025/26 financial year, irregular expenditure in the DBE, South African Council for Educators (SACE), and Umalusi increased from R79.9 million in the previous year, despite efforts to strengthen financial control.
During a parliamentary briefing on Tuesday, DBE representatives explained why infrastructure funds remained unused, while Umalusi acknowledged compliance failures that led to the loss of its unqualified audit opinion.
Collectively, these three institutions managed a budget of approximately R38.3 billion, and all received unqualified audit opinions with qualifications.
Responding to questions about infrastructure funding, Bongani Shabangu, the acting Deputy Director-General of DBE for Infrastructure, stated that the department had repeatedly approached the National Treasury because its infrastructure allocation exceeded expected costs for available projects.
He told the committee: 'We have constantly engaged with the National Treasury regarding the fact that the budget would be too large for the projects we have in the infrastructure sector.'
Shabangu added that the department proposed redirecting some funds to other urgent needs of school infrastructure, but the Treasury expressed concerns about the long-term nature of construction projects.
Subsequently, an agreement was reached to reserve infrastructure funding for sanitation projects in schools in KwaZulu-Natal, Eastern Cape, and Limpopo. Shabangu clarified that these targeted funds are specifically for the three rural provinces: KwaZulu-Natal, Eastern Cape, and Limpopo.
Bongani Shabangu noted that the DBE will closely monitor how funds are spent and which projects are completed. He also commented on the underspending of infrastructure funds in KwaZulu-Natal, explaining that about R400 million was not spent due to additional allocation for storm-affected schools, which was approved late in the financial year. Shabangu reported that 'the province, with our assistance, was able to apply for the transfer of these funds, and these transfers were approved.'
The Auditor-General's report identified irregular expenditure of R75.8 million related to earlier infrastructure contracts. An additional R13.3 million arose from improper procurement of educational services under the Basic Education Employment Initiative and overpayments to unauthorized recipients.
Umalusi, the body responsible for quality assurance in general and higher education and training, recorded R6.3 million in irregular expenditure after exceeding the approved budget. Its CFO, Hendrik van der Walt, admitted that the institution submitted its financial reports late, which contributed to the loss of its unqualified audit status.
Van der Walt told the committee: 'It is a sad day when we were forced to submit our financial reports late.'
He explained that internal issues delayed the submission, although he insisted that the delay did not significantly affect the external audit. Van der Walt clarified that Umalusi recorded a surplus of R3.8 million because income exceeded expenditure, but nevertheless spent more than the approved budget allowed.
He mentioned that the budget adjustment was presented to the minister for approval in March. However, further changes in income and expenditure before the end of the financial year led to the identification of irregular expenditure. Van der Walt assured: 'We have already implemented corrective measures so that this never happens again.'
He added that Umalusi presented the minister with a detailed plan of audit actions with corrective measures, which will be monitored quarterly while the institution works to restore its unqualified audit status in 2026/27.
SACE also received an unqualified audit opinion with qualifications. The Auditor-General identified weaknesses in procurement and contract management, revenue collection, and prevention of irregular expenditure. According to the report, the council failed to take effective measures to collect all its due funds and did not comply with certain procurement requirements.
During the briefing, Tuzana Sofete, the acting head of SACE for ethics and professional development, indicated that the institution would need to consult with its CFO before responding to the raised financial questions.