Treasury presents Covid-19 corruption action plan

To curb the rampant misuse of Covid-19 funds, the treasury and the auditor general’s office have proposed a new set of protocols to “identify the risks of misappropriation, fraud and corruption before a transaction takes place”. 

As the number of coronavirus infections in South Africa increases, the procurement of essential personal protective equipment (PPE) and other goods to fight the virus has been marred by allegations of widespread corruption. 

Reports of corruption, over-pricing and the delivery of sub-standard PPE have become the norm over the past five months, as the country grapples with the pandemic. There have also been reports of politically connected individuals being awarded tenders to supply PPE, often at inflated prices. 

Presenting the treasury’s plan to curb the graft to Parliament’s standing and select committees on finance on Wednesday, director general Dondo Mogajane said that, at the beginning of the pandemic, there was a high demand for and low supply of Covid-19 essential items — and that this situation required the relaxation of regulations governing the procurement of these goods. 

Previous instruction notes issued by the treasury regarding the procurement of PPE did not make provision for accounting officers’ solutions to prevent the misuse of funds. In April, the treasury also relaxed requirements for government departments and agencies to procure essential Covid-19 goods. This was to ensure that the procurement is fast-tracked and that the goods reach their intended recipients and achieve their intended objectives. 

The supply of these goods has now been stabilised; therefore, emergency procurement for PPE has ended and institutions revert back to open procurement processes. Other interventions include: 

  • Placing a price ceiling on all PPE and other protective gear, and permission must be sought to buy goods above the price ceiling;
  • Requiring institutions to provide the treasury with the names of all appointed PPE and protective clothing service providers for publishing on the treasury’s website;
  • Finalising a new procurement Bill; and 
  • Reviewing the legislation regarding emergency procurement procedures and strengthening the accountability by accounting officers.

The treasury is also looking to overhaul the country’s public procurement system. The system will be modernised and automated to ensure “enhanced due diligence and increased efficiency in processing requests”.

On Wednesday Finance Minister Tito Mboweni said that there is a “prima facie” case that proves the treasury’s instructions notes were not followed and this has resulted in the misuse of Covid-19 funds. He said law-enforcement agencies should bring the culprits to book. 

“It is clear that we have to tighten the process … because trust has been broken,” he said. 

Mboweni added that he would be meeting with finance MECs on Thursday to discuss that all Covid-19 procurement contracts be publicly published. 

The government allocated R122.5-billion in the supplementary budget towards combating Covid-19. So far, national and provincial departments have spent R10.4-billion on their various responses. 

Members of the standing and select committees on finance called for long-term structural changes to procurement processes and asked whether the treasury had pursued any action to bring accounting officers to book for Covid-19 graft.

Chair of the standing committee, Yunus Carrim, said: “We need immediate action, which I think every member of this committee is asking for. We need a medium-term strategy, but we also need a longer-term restructuring of the economy.” 

Responding to committee members, Mogajane said that when the issues have been identified at provincial and municipal level, the treasury has intervened. “We have intervened when matters are brought to our attention and we are intervening as and when it is required.”

Mogajane referred to the Gauteng Covid-19 tenders scandal involving the province’s MEC for health, Bandile Masuku. “The provincial treasury head of Gauteng must be held accountable. We will ask questions. They must answer.”

Carrim added that he has yet to receive any reports of accounting officers “who have been taken to task”. 

“This definitely will come. I think now that it is an issue, we are expecting reports to come through … All we hear now is anecdotes.”

Thando Maeko is an Adamela Trust business reporter at the Mail & Guardian

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