Cape Town - Public Works and Infrastructure Minister Patricia de Lille has expressed outrage at the risks identified by Auditor-General Tsakani Maluleke and her department’s Internal Audit Unit into the awarding of contracts in KwaZulu-Natal flood intervention projects.
This comes after Maluleke identified risks in the awarding of contracts during her audit of flood disaster funds.
De Lille, who together with her deputy Noxolo Kiviet inspected the progress of the repair work last week, said she held a meeting with Maluleke’s office and was briefed on their initial findings.
“I have communicated my appreciation to the AG’s office for their work to conduct oversight and an independent audit of these projects to ensure that we determine whether all procurement and financial process were done in a lawful and proper manner.
“In the interest of transparency, I can today confirm that we have received a brief preliminary report from the AG’s office on its live audit and I have acted swiftly to avoid a repeat of the PPE corruption experienced in the country during the Covid-19 pandemic.”
De Lille also said the live audit by the AG’s office determined the procurement process followed by the department to appoint service providers, perform physical verification of the work done and assess contract management records.
The AG’s preliminary report has identified that contracts were made to companies owned by the same director. Some were made to newly registered companies that never traded with the department before and companies that never traded with the department in the previous three years.
There were also awards made to service providers owned by civil servants and suppliers that do not exist on the government’s Central Supplier Database.
“These initial results are extremely worrying and I have engaged the department on these risks and findings to get to the facts and determine which officials need to face consequences where wrongdoing is confirmed,” De Lille said.
According to the minister, the AG’s preliminary audit findings revealed service providers were approached by departmental management using a deviation process where there was no competition among service providers and no market analysis done to assess price reasonability.
There were instances of five quotations exceeding R1 million which were awarded to the same company, the quoted amount by the service providers exceeds the authorised amount, quotations were received after the contract had already commenced on site and projects were not completed within the stipulated time.
De Lille said Maluleke has recommended an investigation into instances of non-compliance to determine the real root cause of the risks, and that irregular expenditure identified from the projects should be included in the 2022/23 annual financial statements.
“The AG’s office also confirmed that the matter has been referred to the labour relations and legal services unit to investigate further,” she said.
De Lille also said when she was first notified of the irregularities, she immediately asked whether they could stop payments to contractors until the full investigations and final audits were completed.
“The regional manager of DPWI in KZN has confirmed that no services have been paid thus far. All payments and services will be subject to approval and ratification by the relevant committees such as the bid adjudication committee and delegated authority.”
The minister said the department’s Internal Audit Unit also conducted an audit on the KZN flood intervention projects and visited the sites accompanied by the relevant senior management in the department in KZN.
“Similar areas of concern were highlighted by the Internal Audit team as was highlighted by the team from the AG’s office.”
According to De Lille, the initial conclusion by the Internal Audit Unit found that key controls implemented by management were found to be inadequate and ineffective to minimise the identified risks to a minimal or acceptable level.
“These initial findings are disappointing and worrying and I will work with the department and AG’s office to get to the bottom of all risks identified and where there is clear evidence of wrongdoing, we will ensure that officials face serious consequences.
“It is extremely disappointing that we continue to see such flags being raised on work where government is needing to respond to an emergency and bring about service delivery to people in need in a responsible manner.
“In a time when there is so much work to be done in our country to deliver services to communities in need, it is truly sad that such information has come to light and my constant appeal to officials is to conduct their work with integrity and due diligence because we are entrusted with public funds and public funds must be spent wisely and for public good,” De Lille said.
Cape Times