Officials flouting supply chain process

The Department of Transport is battling to discipline officials implicated in flouting its supply chain management process, which remains weak and is a major concern for AuditorGeneral Kimi Makwetu.

As a result of its supply chain failures, the department has incurred high levels of irregular, fruitless and wasteful expenditure. Its battle to regain control of the Electronic National Traffic Information System (eNatis) has contributed to this.

It incurred R1.3bn in unauthorised expenditure between 2013-14 and 2016-17 because of the ongoing row over eNatis.

The extension of the eNatis contract has led to protracted court action, while the contract is also under investigation by the Special Investigating Unit. The public protector is conducting an investigation involving the Department of Transport.

Makwetu noted in his audit that there were five internal investigations in progress at the department relating to procurement and contract management, with the outcomes expected in the 2017-18 financial year.

“Irregular expenditure was incurred as a result of officials not following the prescribed procurement processes. Actions were taken by the accounting officer to investigate instances that resulted in irregular expenditure,” Makwetu wrote.

“Effective steps were not taken to prevent unauthorised, irregular and fruitless and wasteful expenditure as required by section 38 (1) c (ii) of the Public Finance Management Act and Treasury regulation 9.1.1,” he said.

Makwetu was scathing about the department’s procurement management when he said goods and services valued at more than R500,000 were procured without inviting competitive bids, as required in National Treasury regulations.

“Although processes are in place to ensure compliance with legislation in the procurement and contract management environment, instances resulting in irregular and fruitless and wasteful expenditure recurred.”

Department acting directorgeneral Mathetha Mokonyama said: “An amount of R1.2bn was allocated to the department in 2016-17 as a direct charge against the National Revenue Fund to offset unauthorised expenditure that was incurred during the 2008-09 and 200910 period as a result of overexpenditure on bus subsidies.”

Mokonyama said R93.8m in irregular expenditure was declared in 2016-17, R92.1m of which was related to a contract extended outside of procurement procedures in prior years.

He said 10 cases of irregular expenditure incurred in prior years and in the current year amounting to R10.4m were condoned. Of the remaining 11 cases, disciplinary proceedings were initiated in seven cases but not in two others.