An internal government report into the finances of the Mpumalanga Department of Public Works has uncovered financial mismanagement, inefficiency and sheer incompetence.
The Mpumalanga government has been dogged by a series of scandals in recent years. Now the report by the provincial treasury, dated March 2003, says the administration has not corrected issues of corporate governance and that its procurement procedures are still riddled with irregularities.
The report paints a picture of widespread misconduct, poor management controls, failure to adhere to statutory obligations and possibly corruption, raising concerns about the provincial government’s ability to effectively discharge its mandate.
The report, which has not been released publicly, exposes the provincial Department of Public Works, particularly, for irregularly awarding contracts worth millions of rands without following proper tender procedures.
MEC for Public Works Steve Mabona this week responded angrily to the report’s findings, saying it was ”rubbish”.
He said the provincial treasury is not responsible for the running of his department.
”They are talking rubbish. Finance does not run the department. Whoever compiled that report is telling lies. The information is not factual. They cannot provide proof for whatever they are saying. You were not supposed to have that document in the first place because it is still under discussion,” said Mabona.
The report is particularly scathing about the department’s failure to keep capital projects within budgets. The problem is particularly rife in the Department of Public Works and the Department of Health.
In one such instance a contract worth more than R3-million to renovate the provincial legislature buildings was awarded to a contractor without a tender process being followed. The contractor was paid before any work was done.
”The project was awarded to a contractor through a single quotation. The project cost is estimated at R3,7-million, which is far above the procurement quotation,” the report reads. Funds for the project were not even budgeted for the year in which it was implemented.
”The Department of Public Works was advised by the provincial legislature that the project is budgeted in the 2003/2004 financial year. The department was advised that the transaction is irregular and appropriate action must be taken to reverse the transaction,” the report says. The report also zooms in on the department’s failure to control its budgets and manage current projects. Many projects, including bridges, roads and health-care facilities, have been halted, allegedly because of serious mismanagement. One such project is Karino Road in the Plaston area.
The provincial government budgeted R16-million for the project. Only 10% of the work has been done but the contractor has been paid R10,7-million, the report says. It appears that the project will not be completed with the remaining funds.
The report says the R5,3-million remaining amount for the project would complete only 90% of the outstanding work.
”If the data provided by the department is accurate, it means that internal procedures and internal control measures for payment approval and processing are lacking,” it says.
On the issue of the department’s failure to keep projects within budget, the report says in the 2002/2003 financial year the Department of Health overspent by R28-million on its projects.
The report recommends that the Mpumalanga government, led by Premier Ndaweni Mahlangu, initiate investigation ”of collusion between certain suppliers and the provincial departments to establish the suppliers who were paid in advance and
recover the interest that should have been earned by government”.
”The provincial expenditure was above the average towards the end of the financial year, which is a great concern because departments no longer spend wisely, but to reduce the under-expenditure,” the report reads.
The report also raps provincial government accounting officers, which, it claims, are sending inaccurate reports to the national Treasury.