MBOMBELA – The bulk of the Mpumalanga Department of Health’s irregular expenditure of R1,9 billion in 2014/15 was incurred without following complete bidding processes.
A number of companies were paid millions of rand while the department disregarded supply-chain procedures in procuring their services, the Auditor General (AG) has found.
According to the AG, R1,7 billion expenditure was incurred procuring goods and services without following a complete bidding process.
A total of R176 million irregular expenditure was due to non-compliance with procurement processes, and the balance of R28,6 million was related to compensation of employees.
MEC for health, Mr Gillion Mashego, told the press during a briefing on the current financial year’s budget, that things had already greatly improved since he took the reins in May 2014.
According to the MEC, the problem areas within the department were human resources, financial management, procurement and infrastructure.
Skilled chief directors have apparently been appointed in these areas, with the exception of procurement where a candidate had been head- hunted but took another job at the last moment. The department has readvertised.
Mashego said the AG highlighted a lot of issues (including accruals and unauthorised expenditure) and they wanted to improve in these areas. “It is our intention to eliminate the challenges.”
According to the AG the department deviated from competitive bidding processes by not inviting bids for procuring goods or services valued at more than R500 000. Instead the department approached the rapid implementation unit (RIU) from where the tenders were awarded without sourcing three quotes.
Spokesman for the department, Mr Dumisani Malamule, claimed there had been standard deviation approval for the maintenance of medical equipment which had to be done by the manufacturers of the machines.
However, the report shows in the vicinity of R30 million was paid to companies listed as consultants and construction companies, and providers of water services, and for training.
The AG further found it was not evident that suppliers were rotated as some got all the work and others nothing.
Mr Zibonele Mncwango, spokesman for the Office of the Premier where the RIU is situated, did not respond to the newspaper’s questions about the lack of rotation of suppliers and the efficacy of the unit.
The report also noted that the department could not provide tender documents or minutes of the bid adjudication or evaluation committees or a need assessment for a number of companies.
Others failed to complete the required declaration-of-interest forms that state that close family or associates of suppliers or shareholders do not work for the department.
This incurred irregular expenditure of approximately R35,9 million. In one instance the AG found awards were made to suppliers in which employees working for other state institutions had an interest, but had failed to submit SBD4 declaration-of-interest forms.
In other cases no evidence could be obtained on the appointment and selection of the bid-evaluation committee and adjudication committee which evaluated the bidders.
There were also instances where the composition of evaluation committees did not adhere to the minimum requirements. He said the R17,9 million paid in overtime to dentists not in accordance with policy, was being investigated by the department.
Malamule said the department “has moved with speed to develop an action plan to resolve all identified issues by the AG, and governance structures have been appointed to ensure that the action plan is monitored and implemented”.
All irregular expenditure has been forwarded to labour relations for investigation and determination of liability.
“To prevent any further irregular expenditure, the department has moved with speed and appointed bid specification committees, bid evaluation and bid adjudication committees.”
Malamule claimed an economising committee overseeing procurement of goods up to R500 000, and a finance district committee and hospital finance committees for procurement of goods up to R500 000, had been appointed.
Action plans to ensure that all issues identified are monitored through an audit committee and a risk register have also been developed.
Two weeks ago the finance committee in the Mpumalanga Legislature learnt that the department had at least R150 million in outstanding invoices from 2015/16.
Sources said the funds were not considered accruals as they were never cash-backed but instead the services had been ordered without there being any budget available.
Malamule denied this, saying they were accruals from work performed in March, the final month of the previous financial year.
“They are being processed and paid as we speak. They are now being paid in the new financial year.”
Ms Jane Sithole, the DA’s spokesman for health, said it was concerning that no one was being held accountable. “The department is clearly finding itself in a deepening financial crisis and we believe only a change in the political leadership can save it.
“Mashego has proved time and again that he is not fit to lead this vital department and the facts and figures speak for themselves,” said Sithole.
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