Covid-19 relief funds treated as a ‘get rich quick scheme’ – SIU report

The Special Investigating Unit’s (SIU) report into PPE corruption says government officials and suppliers treated R145 billion worth of Covid-19 relief funds, as a ‘get rich quick scheme.’

President Cyril Ramaphosa finally released the SIU’s full report probing widespread, rampant and unabashed looting of public relief funds on Tuesday.

The 737-page report makes for grim reading. It details how businesses, individuals, state officials and politicians cynically exploited a public health crisis for personal gain.

“There can be absolutely no doubt that with the declaration of the national state of disaster, Supply Chain Management (SCM) officials were placed in a very, very precarious position,” reads the report.

“Procurement of PPE and related goods and services needed to be undertaken with haste as lives were at stake. At the same time, the public purse had to be protected.

One of the most damning findings, arguably, was the “unrelenting attack” on the Covid-19 relief funds with “scant regard for the public interest.”

“To a large extent, the State institutions involved, simply turned a blind eye to the rule of law and by doing so, they in effect allowed the public purse to be looted,” said the report.

A complete disregard for procurement processes

According to the report, the pandemic brought about a complete breakdown of checks and balances that regulate Public Sector Procurement.

“This then opened the public procurement system up to abuse by unscrupulous individuals who acted with impunity for personal gain,” said the SIU.

Procurement services were neither fair, equitable, transparent, competitive nor cost-effective, and in some instances, officials didn’t even bother to look for more affordable supplies.

Several companies that were awarded tenders were not registered with the South African Health Products Regulatory Authority to import, sell or distribute PPE.

There appeared to be no verification processes, resulting in several companies were not registered with SARS’s as VAT vendors, claiming VAT.

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Political pressure played a role in PPE procurement

The names of the service providers/suppliers were determined before any SCM process commenced.

The report explains there is a thin line between ‘political leadership and political interference.’

Some contend that political office bearers are only accountable to the electorate and those (e.g. the President, or Premier) who appointed them.
“If this is accepted, they would be able to cause huge losses for the State, without any consequences.”

Sub-standard PPE was supplied, but there were no systems in place to confirm delivery of goods resulting in instances of under-delivery, non-delivery or incorrect products being delivered.

There was no attempt to negotiate with service providers/suppliers in bringing prices within the thresholds recommended by National Treasury which resulted in overpayment for PPE and price gouging.

“Shopping around for prices seemed to be an alien concept to many procurement contracts,” said the SIU report.

A total of 227 government officials have been referred for disciplinary and executive action and 386 cases have been reported to the NPA.

The SIU investigation lead to R34.2 million of public funds recovered from dodgy deals and R170 million worth of contracts set aside.

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