The procurement of COVID-19 related goods and services was characterised by flagrant and wanton disregard of the applicable law, policies and procedures, a Special Investigating Unit (SIU) probe has revealed.
However, intervention by the government agency saw the splurge reigned in and millions of rands being recouped through civil litigation, while criminal charges have been laid against the implicated.
With the advent of the COVID-19 pandemic signalling the need for emergency procurement as a response to curbing the spread, President Cyril Ramaphosa in July signed a SIU proclamation to probe allegations of impropriety. This was in connection with the affairs of all State institutions. The President received the report in November.
The report paints a grim picture of procurement processes that were flouted.
Delivering an investigative report on government personal protective equipment (PPE) procurement, SIU head, Advocate Andy Mothibi, on Friday said the unit had received 189 complaints from whistle-blowers.
According to data from National Treasury, R30.7 billion was spent by State institutions between April and November 2020. Of this, R13.3 billion was subject to the SIU investigation.
“Investigations into 164 (26%) PPE contracts, to the value of over R3.5 billion, have been finalised; 1 541 (51%) contracts to the value of R6.8 billion are currently being investigated, and investigations into 851 (22%) contracts are yet to commence.
“More allegations are still being received by the SIU. As such, the numbers change from progress report to progress report,” said Mothibi.
Observations, Mothibi said, suggest that officials in positions of authority within some State institutions believed that the declaration of a national state of disaster meant that all procurement was automatically conducted on an emergency basis, and without compliance with any of the normal prescripts regulating public sector procurement.
Among the SIU’s raft of findings is that departments awarded contracts to companies not registered on the Central Supplier Database.
The report further notes that certain service providers were already in the de-registration process when they quoted and were awarded contracts.
Further, the type of goods supplied were not consistent with the nature of the business for which companies are registered on the CIPC.
“Product specifications were ignored and products that were not suitable for the intended purposes were purchased, and in several instances, against the advice of expert opinion on the usefulness of the products,” said Mothibi.
Certain companies were awarded BBBEE points as level 1 contributors when they did not qualify.
“In some instances, political pressure played a role in the procurement of PPE. It appears that the names of the service providers were determined before any SCM [supply chain management] process commenced, while departments also received substandard and/or defective PPE,” Mothibi said.
As at 20 November 2020, the SIU had instituted civil matters to the value of R259 million for review. These include the recovery of State funds.
The referrals were spread across national and provincial departments, as well as municipalities across the country.
As at 4 February 2021, there were 15 matters enrolled in the Special Tribunal to the contract value of R365 million.
Mothibi said the SIU had made 25 referrals for disciplinary hearings for government officials for misconduct and SCM contravention. Two executive authorities – a Gauteng MEC and an office bearer in a Mpumalanga municipalities – were also referred for administrative action.
Mothibi said the unit had identified R260 million potential cash and assets to be saved and to be recovered from service providers in five provinces.
In this regard, he said the SIU had signed 13 acknowledgement of debt forms in an effort to recover the monies.
Beyond this, Mothibi said the SIU had made 38 referrals to the National Prosecuting Authority in respect of evidence of criminality for prosecution.
“The referrals include allegations of fraud, corruption and financial misconduct relating to the Public Finance Management Act (PFMA) and the Municipal Financial Act (MFMA). The NPA referrals are from the investigations in the following institutions.
“My observation is that the flagrant and wanton disregard is underpinned by an insatiable pursuit of self-enrichment. That cannot go unpunished. We therefore have to ensure that the responsible officials and private sector parties identified should be harshly punished and clear message be sent out to the would-be mal-administrators and the corrupt that action will be taken against them,” said the SIU head.
Mothibi said it was disheartening to see State officials being implicated in unlawful and illegal activities in procurement processes.
“If corruption is not tackled by all in society, it has the potential to weaken the State’s capacity to deliver basic services like water, electricity, roads, housing, healthcare and education. I appeal to public servants and those in positions of power and responsibility to serve the people of South Africa with integrity and pride,” he said.
Mothibi said the SIU would continue to pursue all officials who resigned amid investigations and disciplinary actions by freezing pensions and instituting civil litigation to recover the monies.
“Where there is evidence pointing to any act of criminality on their part, they will also be pursued through criminal investigation and prosecution. Our collaboration and cooperation with other agencies in the Fusion Centre has proved valuable,” said Mothibi.
The Fusion Centre is aimed at maintaining and establishing a platform for information sharing through a collaborative approach amongst stakeholders through evidence-led information.
The NPA has provided prosecutors to guide criminal investigations and will prioritise consideration to the matters referred to.