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The Auditor General (AG) has published his second report on Covid-19 spending in South Africa, showing ‘significant flaws’ in the procurement and contract management processes of public spending on Covid-19.
Presenting the report on Wednesday (December 9), AG Tsakani Maluleke acknowledged that in response to the pandemic, the government had to react quickly and decisively in uncertain times and in an already compromised control environment.
However, he said the country could have achieved more if the funds and related initiatives had been better managed.
Maluleke’s office found that the IT systems, processes, and controls used in government were not agile enough to respond to the required changes.
The lack of data validation, integration, and sharing between government platforms resulted in people, including government officials, receiving benefits and grants to which they were not entitled.
Some of the initiatives did not achieve the desired results and were even abandoned due to failures in coordination, monitoring, and relationships between the three spheres of government.
In cases where enforcement agents were involved, the auditor general found deficiencies in coordination and monitoring that compromised delivery, transparency, and accountability.
TERS benefits
The auditor general said that because the FIU relies on the truthfulness of the statements and information submitted by claimants, this exposed the fund to the risk of paying fraudulent claims.
This risk, Maluleke said, was increased by the expansion of the benefit coverage of the Temporary Assistance Plan for Employers and Employees (TERS) to include employees who were not registered in the fund before the Covid-19 pandemic.
To respond to this exposure, the fund designed post-validation processes to verify paid claims.
However, the attorney general found that as of the date of his report, this process, which includes verification of employer and employee employment information, had not yet begun.
Another risk reported was the possibility of profit being trapped at the employer or bargaining council level and not reaching the intended employees.
“Starting in May 2020, the fund also introduced direct payments to employees’ bank accounts, although the employer would still have to submit the claim request,” he said.
Personal Protective Equipment (PPE)
Maluleke reported that most of the government’s acquisition of PPE is done in the health and education sectors, with an estimated expenditure of R4.6 billion as of September 30.
For its last report, AGSA audited the procurement and payment process, which was completed before the previous report, and in provinces and sites that it had not previously reported on.
In both the health and education sectors, auditors continued to find cases where competitive processes were not followed, resulting in the contract being awarded to a specific provider or group of providers without the necessary motivation or approval for such deviations.
Through the instructive notes of the National Treasury, it was made clear that the requirement of legitimacy must be applied to favor local producers.
However, the auditors did not see this requirement applied consistently in all PPE procurement processes.
Businesses that provide PPE nationwide were not treated fairly and equitably, as some were disqualified for not meeting the requirements, such as tax clearance certificates, declarations of interest, registrations such as businesses and small businesses, or for your state. as local producers, while others were not.
conclusion
Maluleke said that if officials, leaders, sectors, implementing agents and institutions do not do their part and actively partner to strengthen the delivery value chain, it undermines the effectiveness of the program and leads to losses, abuse and costly investigations.
The public sector requires more effective long-term solutions to address the underlying causes of people, systems and processes not being delivered optimally, he said.
“For our part, as the audit office, we will continue to audit Covid-19 funding and follow up on the progress made to address the audit findings and observations in this report as part of our normal annual audit.
“We will also identify material irregularities in this process and begin the processes necessary to address these irregularities,” Maluleke said.
Read: Mboweni on the government using South African pension money and regaining the trust of the people
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