Department of irregular expenditure
More than 100 public works department contracts, ranging in value from a few thousand rands to R7.6-million, are being investigated for “irregular expenditure”, an internal report leaked to the Mail & Guardian reveals.
The report states that in many cases there was no competitive bidding, suppliers on the department’s database were not utilised and fewer than the mandatory three quotes were received. In some instances no tax certificates were provided, and the department is collaborating with the South African Revenue Service to solve these cases.
In a related development the department has suspended several staff members allegedly implicated as a result of the findings of an ongoing investigation by the special investigating unit (SIU), which has allegedly found that they were implicated in corruption, fraud and maladministration. It is understood that the assets forfeiture unit is investigating the possibility of freezing assets in several cases.
The SIU expects its investigation to run for three years, but it has already found that at least R35-million has been paid to entities in which public works’ staff hold undeclared interests. The unit’s focus is on leased accommodation, specific contracts, conflicts of interest and general irregularities.
The department’s former acting director general, Sam Vukela, was placed on fully paid special leave by former public works minister Gwen Mahlangu-Nkabinde last month after the SIU reported that it had uncovered more than 40 cases of tender irregularities amounting to at least R3-billion.
In August, auditor general Terence Nombembe issued a disclaimer with regard to the department’s 2010/2011 financial records after finding insufficient evidence to verify that properties recorded in the immovable assets register were correct and amounted to R3.4-billion. He also found irregular expenditure of R16.5-million.
The department is the custodian of most of the properties in the government’s portfolio. A sitting of Parliament’s public works committee this week made it clear that the department had kept the committee in the dark about its own internal investigations.
Newly appointed Public Works Minister Thulas Nxesi tried to assure committee members on Tuesday that he had encouraged all his officials not to hide anything from them.
“They [the officials] must be frank and share their problems with the committee members. First we must acknowledge there is a problem, otherwise we can’t solve it.”
But the committee members expressed unhappiness over the fact that the department had failed to respond to any of the questions previously put to it.
Dealing with irregular expenditure
After a frustrating morning they ordered the department to provide the committee with details of its reports on the progress made in dealing with irregular expenditure. One committee member, Democratic Alliance MP John Steenhuisen, told the M&G the presentation made it clear that the department could not function without the use of consultants and external service providers.
“It’s unacceptable for the department to be entirely reliant on outside service providers to handle even the most basic functions of data capturing, record keeping and basic audit and supply chain management procedures,” Steenhuisen said.
“What the department desperately needs is a ‘clean-out’ from the director general’s office downwards. Those who’ve shown that they’re not capable need to be moved along and replaced with competent, professional staff who can ensure that the department is put back on a sound footing and that good governance is restored.”
Nxesi’s appearance before the committee came a week after President Jacob Zuma axed Mahlangu-Nkabinde following a report by the public protector that she had acted “unlawfully” by flouting procedures in the lease of two buildings for police office accommodation.
The department’s director general, Siviwe Dongwana, was suspended in December last year during an uproar over the police leases. He is still being paid and reportedly earns R1.5-million a year.
In Parliament this week the acting director general, Mandla Mabuza, tabled a plan of remedial action for the department. Mabuza had already upset committee members by failing to appear before them last month, citing another engagement.
“While we acknowledge capacity issues, inadequate policies and business processes, as well as the inevitable political transformation which has happened in the department, we also agree that a robust culture change has to happen urgently,” said Mabuza.
Committee chair Manana Mabuza welcomed the honesty and openness to which the minister referred. “But honestly, director general, if you want the department to run smoothly, there should be reconstruction among officials, among their souls, mind and hearts. There are groups and cabals among you, and you need to start introspecting.”
Officials told the M&G later that the chairperson had been right in her assessment. “We have to look into our souls, minds and hearts. But we also need strong leadership.”