AG shows teeth over irregularities found in Defence Department probe

AUDITOR-GENERAL (AG) Tsakani Maluleke is deciding on the most suitable action to take against the Department of Defence after it did not fully address material irregularities in the procurement of a Covid-19 drug from Cuba and the leasing of unoccupied office buildings.

The Public Audit Amendment Act, signed into law four years ago, empowers Maluleke to refer suspected material irregularities found in audits to law-enforcement agencies for further investigation and to compel heads of department to take appropriate remedial action.

In her 2021/22 audit report, Maluleke said the Department of Defence imported an unregistered Cuban drug in 2020 without approval of the SA Health Products Regulatory Authority (Sahpra) in contravention of the Medicines and Controlled Substances Act.

She said the department procured 970 695 vials of Heberon for about R260.59 million.

“Of this amount, only R33.5m had been paid to the supplier as at March 31 2022. This non-compliance was likely to result in a material financial loss of R260 342 813 for the Department of Defence, as Sahpra had authorised the department to use only 10 of the 970 695 vials imported.”

Maluleke said she had notified secretary for defence Sonto Kudjoe of the material irregularity in August last year and invited her to make a written submission on the actions that would be taken to address the matter.

Kudjoe provided a written response the next month.

Maluleke said: “The response did not appropriately indicate all the required actions to address the matter and I requested additional information to enable me to conclude on appropriateness of the actions being taken.”

A ministerial task team probed the procurement of Heberon and made recommendations, which included returning some of the drugs to Cuba and taking disciplinary action against implicated officials.

The drugs were returned to Cuba on the instruction of Sahpra and Cuban representatives acknowledged receipt of the two shipments in January and February this year.

“I did not receive any further response from the accounting officer on actions taken to resolve the material irregularity, including the R33.5m paid, and have concluded that the actions taken are not adequate to fully address the material irregularity.

“I am in the process of determining the most suitable action to take,” Maluleke said.

The AG also said she was considering the most suitable action to be taken regarding the lease payments made for unoccupied office buildings that resulted in a financial loss.

Maluleke said Kudjoe provided a written submission in June 2022 which acknowledged the loss, but stated that the board of inquiry did not find anyone liable for it and no disciplinary action could be taken.

Maluleke also said no appropriate action was taken to address the material irregularity flagged in the procurement of 1 000 infra-red thermometers at a price of R3 984 each, spending a total of R3984 750 under Covid-19 personal protective equipment expenditure.

The AG added that she informed Kudjoe in January she was not satisfied with the progress on implementation of the directive and remedial actions involving a five-year inventory and asset verification contract awarded in 2017.