The A-G identified several irregularities in the awarding of these tenders which included government departments failing to obtain permission from their provincial Treasury departments to deviate from procurement systems.
PROVINCIAL health departments awarded personal protective equipment (PPE) tenders to companies which are not registered with the South African Revenue Services (Sars).
This was revealed by the Auditor-General Kimi Makwetu during the announcement of his preliminary report into the awarding of PPE contracts in April after President Cyril Ramaphosa announced a R500 billion social relief package to fight the Covid-19 pandemic.
Makwetu identified several irregularities in the awarding of these tenders which included government departments failing to obtain permission from their provincial Treasury departments to deviate from procurement systems.
Addressing the media in Pretoria on Wednesday, Makwetu singled out Gauteng as one of the provinces which gave huge PPE tenders to companies with no track record to supply health services and equipment.
He said some of them were only established after the outbreak of the virus. Makwetu also said that some of these companies were only registered on the government’s Central Supplier Database (CSD) when the country was already under lockdown.
“Teams are still busy auditing the procurement processes, but are identifying matters such as suppliers not having valid tax clearance certificates, quotation and competitive bidding processes not being correctly applied, inadequate or inaccurate specifications and evaluation criteria and the incorrect application thereof, conflicts of interest, and the awarding of a contract in the health sector to a supplier with no previous history of supplying or delivering PPE.
“There are insufficient controls to ensure the receipt and payment of PPE at the levels of quality and price ordered,” Makwetu said.
He said his analysis of orders placed by health departments identified that some items were priced at more than double and even five times the prescribed price.
“Similar instances were identified in the procurement of PPE in the education sector where the national and provincial departments are not procuring PPE at market-related prices,” he said.
He further said: “The audit is in different stages of completion – in some provinces, a lot of the procurement was audited while in others, audit work must still begin. The audit teams were not able to consistently obtain all the information needed for auditing PPE and the audit has been plagued by delays.
“Nonetheless, a worrying picture is emerging – thus far the key findings on PPE are: There are delays in the delivery of PPE. In the education sector, this was one of the main factors contributing to the delay in the opening of schools,” Makwetu said.
He said in some provinces, schools used unreliable methods for determining the number of employees and learners at schools and not the management information systems of education available to them.
“The needs analyses did not always consider that support staff in schools (such as cleaners and administrative personnel) also require PPE, and some schools did not receive sufficient masks and face shields for learners and teachers. Most of the affected schools had to use their own funds to purchase PPE to address the shortages, leaving the schools that are in financial difficulty in a vulnerable position,” Makwetu said
Makwetu said serious intervention was required by the provincial leadership to ensure all these irregularities are addressed.
“Departments must investigate unjustifiable awards of contracts fully and hold transgressors accountable. They should also fully disclose such instances as it relates to irregular expenditure and recover potential losses,” Makwetu said.
He also said he was going to share his findings with the SIU to help it to recover the funds.