“We are particularly concerned about unfairness in the awarding of government business and that sufficient care was not taken to protect against overpricing, as we identified a number of instances where municipalities paid excessive prices for goods and services”.
In the case of paying excessive prices, the AG special report said the Tshwane metro placed an order for 3,000 pairs of goggles at a unit price of R552 per pair, exceeding the National Treasury's stipulated market-related price of R71.25 per pair by 675%.
In eThekwini, the AG found that the municipality made a total excess payment of R952,000 after the placement of an order for 100,000 surgical face masks at a unit cost of R22, exceeding the National Treasury's stipulated market-related price of R12.48 per mask.
It found that the JB Marks municipality ordered 500 units of 5-litre sanitiser bottles at a unit price of R750, exceeding the stipulated price of R329.27 per bottle.
“These municipalities might have acquired more goods and services in their efforts to fight the affect of the pandemic if PPE items had been procured at prices closer to market-related prices as stipulated by the National Treasury,” the report said.
There were also cases where two municipalities procured PPE items to the amount of R10.5m from suppliers and/or employees that are in the service of the state.
In the case of Tshwane, the report said, its internal control environment did not detect that it procured PPE items from suppliers that did not submit a declaration indicating whether any of their directors, managers, principal shareholders or stakeholders were in the service of the state.
“This resulted in the procurement of PPE items to the value of R9,357,235 through an SCM (supply chain management) deviation from nine suppliers that submitted false or no declarations.”
However, despite the deficiencies, there were best practices in place.
“Sixteen of the 33 municipalities developed specific Covid-19 needs analyses for PPE items to ensure that the optimal quantities of PPE are procured.”
It said at Polokwane, where overpayments were identified for the PPE items procured, these monies were recovered from the service providers.
“This is an indication that management controls did pick up on errors and responded to them appropriately.”
It said in Cape Town, there was a number of best practices around PPE stock management, including a dashboard for monitoring stock on hand to ensure that supply met demand.