Makwetu slams Sita irregular expenditure

THE auditor-general, Kimi Makwetu, has hauled the State Information Technology Agency (Sita) over the coals for not taking effective steps to prevent R351 million in irregular expenditure.

“Of the amount, R278 631 000 relates to non-compliance with legislation relating to prior years that was identified in the current year. The majority of the irregular expenditure was caused by the lack of effective implementation of contract monitoring measures to track expiry of contracts timeously,” Makwetu said.

He made his finding in the audit report contained in Sita’s annual report for 2017-18 tabled in Parliament last week.

Makwetu also expressed concern that some of the bid documentation for procurement of commodities designated for local content and production did not meet the stipulated minimum threshold, as required by the preferential procurement regulation.

“Similar non-compliance was also reported in the prior year,” he said.

Sita disclosed in the financial statements that a total of R727m in irregular expenditure incurred over the past years was awaiting condonation.

The board said management had embarked on a process to transform the supply chain management function to include investigations into possible irregularities.

“The verification and cleaning-up exercise resulted in a significant increase in the number of reported cases of irregular expenditure in 2018, of which the majority arose in previous financial years,” the board said.

It was optimistic that transformation of the supply chain management system would result in improved service delivery and contribute to prevention of irregular expenditure.

Sita chief executive Setumo Mohapi said they welcomed the unqualified audit opinion.

Mohapi said Sita would work tirelessly to eliminate future material findings, ensuring compliance was tightened to improve supply chain management and contract management.

“We will focus our energised risk management practice on the area of supply chain, and ensure that we arrest operational, compliance and fraud risks as early as possible before they represent strategic and reputational risk for the organisation.”

Mohapi also said the management had established the loss control committee to ensure effective management of incidents of financial misconduct.

“Formal investigations relating to irregular expenditure and fruitless and wasteful expenditure have been initiated and disciplinary action has been instituted in respect of the majority of cases.”

Mohapi, who has been with Sita for three-and-a-half years, said the year under review highlighted that they had a long way to go to clear the foundation and set a new base.

“The past financial year shone a bright and public light into the unclean comforts of the old order, and we are still horrified when, week in and week out, we have uncovered the high price that the taxpayer has been paying to sustain the old order,” he said.