Officials get R800m from tenders
MUNICIPAL officials and their families have pocketed more than R800-million of taxpayers' money in the awarding of tenders at various municipalities around the country.
This is according to auditor-general Terence Nombembe's 2010/11 consolidated report on the performance of local government. It reveals that the municipal workers either owned the companies that received the tenders or they were friends or family of those companies.
The money was part of R11-billion mentioned in the report as having been spent in unauthorised, irregular, fruitless and wasteful expenditure.
The tenders were irregularly awarded to senior municipal managers, councillors and other officials though this is prohibited by supply chain management regulations.
Nombembe highlighted the same problem last year where officials, who were mandated to deliver services to people, found themselves on the wrong side of the law.
But with history repeating itself, and on an increased level, it shows that municipal bosses have not put their foot down. The report also indicates that limited action has been taken in response to similar findings last year.
"Opportunity was missed to show these irregular actions [by officials] or suppliers are not tolerated and have consequences," the report says.
These prohibited awards have more than doubled in just a year, from 22% to 46%, as officials take advantage of their councils' weak procurement controls which fail to detect whether declarations of interest were submitted.
The report suggests this irregular expenditure could have been prevented and detected by implementing basic controls, including declarations of interest by the parties.
Although awards to close families was not prohibited, it was unlawful for officials to conceal relations.
Gauteng topped all provinces in the awarding of tenders to companies linked to senior municipal officials, followed by KwaZulu-Natal and North West.
"Although there was little evidence that persons were involved in making the award, the possibility of undue influence cannot be discounted, especially if the persons were in positions of influence, which could create opportunities," the report reads.
Failure by suppliers or officials to declare their interest constitutes a corrupt and fraudulent act and could be subject to investigation, as recommended by Nombembe.
Nombembe said problems in procurement, IT controls, human resources and errors in financial statements had reached intolerable levels and had contributed to the stagnating performance of municipalities.