National 6.9.2016 04:32 pm

Govt depts continue to flout finance rules with impunity

Picture Thinkstock

Picture Thinkstock

The office of the Chief Procurement Officer has expressed concern about government department’s failure to comply with the 30-day payment rule for procured services.

An unnamed government department drove a travel agency into business rescue by failing to pay its annual bill of R33 million, and had since contracted to a new agency, which is now experiencing the same problems, the office of the Chief Procurement Officer (OCPO) told MPs on Tuesday.

The OCPO’s Rakgadi Motsetso said the chief financial officer and the supply-chain manager ignored demands by the treasury agency to explain its conduct. She mentioned the case in a briefing to Parliament’s watchdog standing committee on public accounts (Scopa) as an example of consistent failure by government departments to honour the 30-day payment rule for procured services.

Motsetso said it was not a case of departments lacking the funds to pay for services, but with the notable exception of the department of human settlements, “most departments are just not paying”.

When pressed by MPs, she declined to name the department, saying she could only do so on Friday in a written report to the committee, as departments had another day to respond to questions from the office.

Solly Tshitangano, the chief director for governance, monitoring and compliance at National Treasury, zoned in on departments’ abuse of exceptions provided for in the Public Finance Management Act to enter into long-running contracts without putting these out to proper tender.

“They call it confiment — when you appoint without competitive bidding — and these contracts are expanded and expanded,” he said.

“It will be varied and varied forever.”

Questioned about the highly public spat between National Treasury and Eskom’s top management over the probe by Chief Procurement Officer Kenneth Brown into coal contracts, Tshitango confirmed that the finance ministry finally last week obtained the information it demanded from the electricity utility in April.

“Last week, after the dispute we read about they submitted the accounts and outstanding documents, and we are now assessing [these],” he said.

National Treasury last week issued a biting statement accusing Eskom of failing to comply with requests for records of advance payments to Tegeta, a mining company linked to the Gupta family, and lying by claiming that these had been extensively scrutinised, including by the finance department.

This came after reports emerged that Eskom had paid Tegeta more than R130 million for sub-standard coal, and that both were stonewalling a probe by Brown into contracts worth more than R10 million.

Thsitangano was asked by MPs why the value of so-called transversal contracts, drawing in several government departments, being managed by Treasury as required by new regulations, only stood at R26 million.

He said this was the case because the regulations still had to be promulgated, at which point departments would then be forced to comply.

The office of the chief procurement officer was established in February in a bid to stem corruption in supply chain management system. Brown has said he wants to save the state R75 billion in graft and waste over three years.

– African News Agency (ANA)

poll

today in print