The Limpopo department of transport squandered millions of rands on a transport convention, a report by Auditor General Shauket Fakie has found.
Among the findings were that the department did not budget correctly, overstated income and understated expenditure to the value of millions of rands.
The investigation was held after the Limpopo standing committee on public accounts requested Fakie to audit all income and expenditure vouchers of the International Transport Convention (ITC), held in Polokwane in 2005.
The report found that the department did not accurately budget for the convention and overstated its income of R25,5-million by 91,4% as it only received an income of R2,2-million.
The department also incurred R25,6-million in expenditure, which was R3,6-million more than the original expenditure budget of R22-million.
The report found there had been a ”lack of control” in ensuring all income was received and collected.
”While an amount of R981 590 remains uncollected, the issue is that no evidence can be found that this was reported to the executive authority and the provincial treasury,” the report reads.
The department was forced to use its own budgeted funds to pay for convention expenses when R12-million identified as a ”government contribution” failed to materialise.
”In order to replace the funds spent on the ITC and enable the department to continue with its existing projects, it then requested R11-million from the Urban Transport Fund’s [UTF] budget that was approved by the UTF’s board.
”It is the responsibility of the department of roads and transport to ensure … the integrity of the department’s accounting and financial reporting systems and that appropriate controls are in place,” said Fakie.
Mismanagement of contracts and unjust disqualification of tenders were other findings of the report.
Fakie found the department often paid more for services, as procurement policies were not strictly adhered to and tenders were unjustly disqualified, with evaluation criteria not equally applied to all bidders.
One example was when the department paid R1,4-million for cleaning and security services after disqualifying a bid of R300 000.
The reason given for this was that the total bid price was below the benchmark, when it was found no benchmark had been set.
Management of contracts was also found to be lacking. Companies were paid in advance without departmental approval and for services not rendered.
An example of this was the funding of a R5,6-million permanent 10 000-seat grandstand, which was never built. Instead the money was used on boreholes, irrigation and two water tanks.
”When asked, the department was unable to provide the auditor general with specific details as to the cost of the boreholes, irrigation and tanks,” read the report.
The acting head of the department undertook to ensure corrective measures were taken to prevent similar incidents in future.
This would include effective planning, the application of correct procedures and budgetary control.
”It is hoped that this report will constructively contribute to the establishment and implementation of proper management measures, controls, processes and systems for events such as the convention and, consequently, to improved value for money and service delivery,” Fakie added. — Sapa