Question

The PFMA cautions public servants about improper/inappropriate expenditure. Define the following categories of improper/inappropriate expenditure and provide an own example of each one:

 Fruitless and wasteful expenditure

 Irregular expenditure

 Overspending

 Unauthorised expenditure

Answer 1

Answer:

i)Fruitless and wasteful expenditure:It refers to expenditure that is useless and could be avoided had reasonable care been taken.Cost of litigation that can be avoided and penalty for non compliance of statutory provision are examples of such expenditure.

ii)Irregular expenditure:It refers to expenditure that was not incurred in the manner presecribed by law.For example,assume that purchase of equipment requires tendering but it was purchased without inviting tender and result in higher purchase cost of equipment.

iii)Overspending:It means spending more than what require.Take a example of construction of building,you spend $5 million on it however the same can be constructed in $4 million only.$1 million is considered as overspending here.

iv)Unauthorised expenditure:It refers to expenditure which is not as per condition attached.For example,suppose a grant from government requires that you must expensed such grand on purchase of equipment but you utilise such grant for holiday trip.