Public works spent R35m on Beitbridge fence, rent and state funeral 'irregularities'

The public works and infrastructure department has suffered seven “material irregularities” which cost the state R43.3m from 2019 to date.

The irregularities include:

• “unfair procurement process” for the controversial Beitbridge border fence project of more than R17m;
• overpayment on buildings occupied by the rural development department, which cost R10m; and
• spending on state funerals in excess of the contract amounts, which cost more than R8m. 

This was revealed by the office of the auditor-general (AG) on Wednesday in a presentation to parliament’s standing committee on public accounts (Scopa). 

Officials said the department’s audit outcomes had not improved over the past five years.

“The lack of improvement is attributable to management’s inability to implement proper record keeping controls in a timely manner to ensure that complete, relevant and accurate information is accessible and available to support financial and performance reporting.”

The audit outcomes of the department's property management trading entity had remained unchanged over the past four years, continually achieving a qualified audit opinion.

The entity disclosed details of irregular expenditure under assessment of more than R1.5bn due to variation orders above 15% that were not approved by the National Treasury.

The AG found disciplinary steps were not taken against officials who incurred and permitted fruitless and wasteful expenditure, and losses were not recovered from those responsible.

“Appropriate audit evidence could not be provided to confirm that investigations were conducted into all allegations of financial misconduct committed by officials and disciplinary hearings were not held for confirmed cases of financial misconduct committed by some of the officials.”

In the 2020/2021 financial year, neither the department nor the trading entity incurred fruitless and wasteful expenditure. The AG, however, said it was a concern that there was no movement on such expenditure incurred in the prior years.

Regarding procurement, several contracts were awarded without competing bidders, did not comply with specified criteria requirements, were without the prescribed number of written price quotations from prospective suppliers, and deviation was approved even though it was possible to obtain quotations.

The AG also found that some contractors had tax issues which had not been declared by the SA Revenue Service to be in order.

The AG has recommended that consequence management be implemented and monitored on employees responsible for irregular expenditure and financial and other misconduct.  

“Leadership of public institutions must instil a culture of accountability and a tone that will ensure internal controls are adhered to, and where transgressions are identified, immediate appropriate action should be taken.”

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