Public servants still feeding off the state

• Treasury report shows 2,349 businesses in which public servants are involved in supplying goods or services

Public-sector employees continue to do significant of business with the state despite this being prohibited because of a conflict of interest.

Public sector employees continue to do significant amounts of business with the state despite this being prohibited because of the conflict of interest involved.

An amount of R8bn was paid to 2,349 businesses in which state employees were involved between April 1 2017 and the end of January 2018. These suppliers had 2,704 state employees listed on the government’s central supplier database as owners, directors or nonexecutive directors. They were employees of national and provincial governments, some municipalities and three public entities.

The figures were disclosed in a report by the Treasury on state employees doing business with the government as at February 2018. It was tabled in Parliament by Finance Minister Nhlanhla Nene.

A total of 28,427 state employees were registered as owners, directors or nonexecutive directors of businesses on the database, which is operated by the Office of the Chief Procurement Officer.

“It is safe to say the numbers of employees identified to be owners/directors/nonexecutive directors of suppliers conducting business with government are understated,” the report said.

This was because the analysis only related to expenditure of R124bn of total government expenditure out of an estimated R938bn. Only 90% of all state employees were available for validation.

In addition, the report noted that contrary to Treasury instructions, R22bn of national and provincial expenditure was awarded to more than 33,000 suppliers who were not registered on the central supplier database.

David Ross, a DA member of Parliament’s standing committee on public accounts, said that the statistics were “shocking” and in “gross violation” of the Public Service Act and public service regulations.

He said public servants doing business with the state were given a deadline of January 31 2017 to either resign from the public service or relinquish their business interests. In addition, the Public Administration Management Act compelled state employees to disclose their financial interests.

“President Ramaphosa and his executive must take urgent steps to deal with the culture of lawlessness that has become pervasive in state procurement,” Ross said.

The Treasury report noted that “a culture of noncompliance in supply chain management is prevalent across all spheres of government with little or no consequences”.

It complained that the chief procurement officer had not received adequate support from the state.