Government entities racked up more than R2-billion in wasteful expenditure in the past financial year and incurred another R26.4-billion in irregular spending, the Auditor General said on Wednesday.

In both instances, the transgression increased by more than a third since the previous financial year, AG Thembekile Makwetu told Parliament's watchdog public accounts committee, Scopa.

Makwetu reported that unauthorised expenditure came to R2.3-billion, noting that little progress had been made in reducing the extent of this since 2011.

The home affairs department was the biggest culprit, contributing R301-million to that sum, followed by public works with R166-million.

Scopa heard that most of the irregular expenditure was the result of departments failing to obtain three tenders for contracts and contracting with companies that did not have tax clearance from the South African Revenue Service.

Makwetu said overall audit outcomes of government entities had improved in the past year, with 58% avoiding qualified audits. However, he added this was largely because his office helped financial staff to correct errors made in their original submissions because they lacked reliable internal controls. Without these interventions "it would not have been an improvement", he said.

The AG's office had to step in, Makwetu added, because "there are very primary systems that are not in place" in government accounting, he said.

"There is nothing that will beat the existence of very strong daily disciplines in all of these institutions... In the absence of that, this will become a perpetual cry that does not go anywhere," he said.

Makwetu said his office believed there was a fundamental lack of leadership in government departments with regard to correcting insufficient internal controls.

"Who takes the necessary action when things have gone pear-shaped? That question of leadership is also related to consequences, because clearly if there was pro-active action taken at a leadership level then there will be a possibility for consequences to flow. I think we are flagging this issue... Our assessment is that it is nowhere near where it ought to be."