"There is a skills crisis"

National government departments spent R33.5 billion on consultants over three years, Deputy Auditor General Kimi Makwetu said on Thursday.

Eight departments spent 74% of this total, or R24.6bn, Makwetu told reporters in Pretoria.

“There is a skills crisis. Where they do not have skills in [the] public sector they revert to sourcing the skills from [the] private sector,” he said.

“To what extent are we getting value from resources from the private sector?” 

He was briefing reporters on the Auditor General’s (AG) performance audit of the eight national departments, and 124 contracts with service providers.

The departments, which were chosen from 42 nationally, were: correctional services, defence, environmental affairs, health, police, rural development and land reform, transport, and water affairs.

According to the summarised audit outcomes, the defence department spent the most on consultants, at R10.4bn from 2008/09 to 2010/11.

All 27 contracts concluded by correctional services were found to have problems.

“The nature of these significant deficiencies is concerning,” Makwetu said.

The department of correctional services spent around R2bn on consultants.

The environmental affairs department, which spent R550 million on consultants, and water affairs, R4.2bn, also had a significant number of weaknesses.

Makwetu said the health department was the exception, with successes in some areas. It had spent the least on consultants, about R416m.

The departments were selected based on the AG’s assessments of possible weaknesses in the use of consultants and spending trends.

“The decision was based on historical problems... and ones which are the big spenders,” said Makwetu.  

The AG’s report showed that consultants were being appointed in areas where permanent employees were both needed and would have been more cost effective.

Makwetu said departments lacked skilled staff. Auditors found consultancy projects valued at R3.06bn which were initiated on the basis that there was a lack of internal capacity.

According to the report, detailed documents to support the decision to appoint consultants were not available for 63 contracts amounting to R1.9bn.

Internal problems, which included a lack of proper needs analyses and the filling of vacant posts, had led to contracts being extended. Forty-two contracts were extended by R1.09bn, while formal bidding processes were not followed for contracts worth R320.4m.

Reasons for deviations were not properly documented.

For 21 projects valued at R2.4bn, the contracts and payments were not properly monitored to ensure the work was done.

“This report shows that when government departments use the services of consultants without proper controls, taxpayers get far less than they pay for,” Makwetu said.

“Often, the ill-planned use of consultants comes at an exorbitant cost when compared to available alternatives. Also, in certain instances, the goods produced by consultants are not used as intended.” 

Makwetu said the AG had already met ministers, their heads of administration, chairs of portfolio committees of the audited departments, the National Treasury and chairs of oversight committees.

All had given a “positive commitment” to fixing the problems, he said.

A performance report on provincial departments would be compiled at a later stage.