12 000 ghosts on state’s payroll
National Treasury has discovered about 12 000 dead people in its register of companies that do business with the state.
National Treasury has discovered about 12 000 dead people in its register of companies that do business with the state.
The shocking discovery was made during a clean-up of the information system the Treasury’s procurement office undertook to rein in spending, said Schalk Human, the unit’s acting head. It has also identified about 14 000 state employees listed as directors of companies awarded state contracts in violation of regulations.
“We will report on them even if we drag those 14 000 to court by their hair and lock them up,” said Human.
Fighting graft and achieving savings is even more necessary since two ratings companies downgraded South Africa’s sovereign credit rating to junk. Fraud and inflated prices from suppliers consume 40% of the state’s R600 billion ($46 billion) budget for goods and services, Human’s predecessor, Kenneth Brown, said last year.
Some people set up companies with fake documents or the identities of dead citizens and use these entities to tender for a project at higher prices, making their legitimate businesses seem as if they’re pitching for the same work at cheaper rates, Human said.
His office, with about 100 staff, was created four years ago to contain spending and cut graft to curb escalating debt. While the procurement office fulfils an important constitutional role in protecting public money, it’s not insulated from political interference, according to Ralph Mathekga, an analyst at Mapungubwe Institute for Strategic Reflection. “The question is whether there is political will to act decisively to relieve the civil servants doing business with the state of their employment,” he said.
The unit’s investigations into some government projects have pitted it against some of the country’s most-powerful politicians.
Last year, it criticised Eskom for resisting efforts to review its coal-supply contracts with Tegeta Exploration & Resources, partowned by the Guptas. Last year, Eskom paid Tegeta R659 million for coal before receiving it, which was flawed and should have been converted into an interest-bearing loan, the procurement office said in a draft report leaked to
Business Day newspaper. Eskom has challenged the recommendation, but Human says “prepayment is unheard of”.
The unit will take a central role in overseeing procurement rules for the government’s programme to build new nuclear plants.