Trea­sury’s spend­ing comes un­der fire

Racked up R770m in ir­reg­u­lar ex­pen­di­ture, splashed out R67m on goods and ser­vices it didn’t re­ceive, A-G re­veals

Cape Times - - NATION - LOYISO SIDIMBA loyiso.sidimba@inl.co.za THEMBA GODI Chair­per­son of the Na­tional Assem­bly’s stand­ing com­mit­tee on pub­lic ac­counts

IN A DAMN­ING re­port, Au­di­tor-Gen­eral Kimi Mak­wetu has found that the Na­tional Trea­sury racked up nearly R770 mil­lion in ir­reg­u­lar ex­pen­di­ture and paid an­other R67m for goods and ser­vices not re­ceived.

In his re­port on the audit of the Trea­sury’s 2017/18 fi­nan­cial state­ments, Mak­wetu ob­served that con­tracts were awarded to sup­pli­ers whose tax mat­ters had not been de­clared by the SA Rev­enue Ser­vice.

”Some of the con­tracts were awarded to bid­ders who did not score the high­est points in the eval­u­a­tion process as re­quired by of the Pref­er­en­tial Pro­cure­ment Pol­icy Frame­work Act and the Pref­er­en­tial Pro­cure­ment Reg­u­la­tions,” read the re­port.

Ac­cord­ing to Mak­wetu, Trea­sury, which re­ceived an un­qual­i­fied audit opin­ion, in­curred ir­reg­u­lar ex­pen­di­ture of R768.9 mil­lion, as it did not fol­low proper ten­der pro­cesses.

It also did not prop­erly ap­prove its ex­pen­di­ture.

The au­di­tor-gen­eral found that bid­ders who failed to sub­mit manda­tory doc­u­ments were eval­u­ated for pref­er­en­tial points.

This non-com­pli­ance re­lated mainly to trans­ver­sal term con­tracts fa­cil­i­tated by the de­part­ment.

Trans­ver­sal term con­tracts are cen­trally fa­cil­i­tated and ar­ranged by the Na­tional Trea­sury for goods or ser­vices that are re­quired by one or more than one gov­ern­ment de­part­ment or state in­sti­tu­tion.

Mak­wetu also iden­ti­fied sig­nif­i­cant in­ter­nal con­trol de­fi­cien­cies, lack of ad­her­ence to sup­ply chain man­age­ment reg­u­la­tions, procur­ing goods and ser­vices with­out invit­ing com­pet­i­tive bids as well as ap­proval of de­vi­a­tions when it was prac­ti­cal to in­vite com­pet­i­tive bids, among other find­ings.

”Lack of for­mal busi­ness case, proper project man­age­ment and in­ad­e­quate bud­get mon­i­tor­ing for the IFMS (In­te­grated Fi­nan­cial Man­age­ment Sys­tem) pro­gramme may re­sult in fail­ure to de­liver the over­all qual­ity so­lu­tion on time and within the funds al­lo­cated,” the au­di­tor-gen­eral said in his find­ings.

Last year, it was es­ti­mated that the sec­ond phase of the IFMS would cost R4.3 bil­lion, in­clud­ing the R1.2bn spent on the aban­doned first phase, and was ex­pected to be fully im­ple­mented by June 2021.

The pay­ment of R67m, which was de­clared fruit­less and waste­ful ex­pen­di­ture for ser­vices not re­ceived was a re­sult of tech­ni­cal sup­port and main­te­nance of the IFMS.

The gov­ern­ment hoped that the IFMS would re­place legacy in­for­ma­tion tech­nol­ogy sys­tems. These in­clude the Ba­sic Ac­count­ing Sys­tem, Lo­gis­ti­cal

Mak­wetu’s audit re­port fit­ted the pic­ture of the gen­eral de­cline in fi­nan­cial man­age­ment in gov­ern­ment in­sti­tu­tions

In­for­ma­tion Sys­tem, Per­son­nel and Salary Ad­min­is­tra­tion Sys­tem and Vulindlela. They are meant to im­prove pro­cure­ment, hu­man re­sources, fi­nan­cial and cat­a­logue man­age­ment as well as the pay­roll in­te­grated data ex­change.

In March, Na­tional Trea­sury un­der­took to act speed­ily and de­ci­sively if any cor­rup­tion or wrong­do­ing was iden­ti­fied by a foren­sic process – fol­low­ing find­ings of its in­ter­nal audit unit that con­sul­tants work­ing on the IFMS were made to mon­i­tor them­selves, among other find­ings.

Chair­per­son of the Na­tional Assem­bly’s stand­ing com­mit­tee on pub­lic ac­counts Themba Godi told In­de­pen­dent Me­dia yes­ter­day that they ex­pected Na­tional Trea­sury to present the find­ings of the foren­sic in­ves­ti­ga­tion it com­mis­sioned into IFMS in the next few weeks.

He said Mak­wetu’s audit re­port fit­ted the pic­ture of the gen­eral de­cline in fi­nan­cial man­age­ment in gov­ern­ment in­sti­tu­tions.

He said that the Trea­sury was not well staffed and that it had been rocked by in­sta­bil­ity both po­lit­i­cally and ad­min­is­tra­tively, with sev­eral se­nior of­fi­cials leav­ing.

The Na­tional Trea­sury did not re­spond to ques­tions this week.

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