GDE incurred more than R1 billion on irregular expenditure in the 2019/20 financial year

The Democratic Alliance (DA) in Gauteng is concerned that the Gauteng Department of Education (GDE) has incurred R1 030 657 000 in irregular expenditure for the 2019/20 financial year.

This information was revealed in the department’s 2019/20 annual report.

According to the Auditor-General, effective steps were not taken to prevent irregular expenditure amounting to more than R1 billion. This irregular expenditure is as a result of non-compliance in respect of procurement and contract management.

The reports of more than R 431 million in irregular expenditure purported to be used to decontaminate schools last year clearly confirms that the department is disregarding the Public Finance Management Act (PFMA).

Senior management have failed to adequately review and monitor compliance with the PFMA and treasury regulations. There are number of allegations of procurement irregularities, financial misconduct, fraud, and theft relating to prior years.

The DA has tabled written questions to the Gauteng MEC for Education, Panyaza Lesufi in the Gauteng Provincial Legislature (GPL) to establish the status of investigations into these allegations.

Lack of consequence management contributes to irregular expenditure. These irregular expenditure amounts are increasing on a yearly basis and this clearly indicates that the department is failing when it comes to good governance.

It is high time that both the head of department and chief financial officer should explain why the department has failed to take the necessary measures to avoid irregular expenditure arising from procurement processes.

Gauteng Provincial Government the worst in the country for not paying suppliers in 30 days

The Gauteng Provincial Government consistently fails to pay suppliers within 30 days as it is mandated to do by the Public Finance Management Act (PFMA).

This was revealed by the Minister of Finance, Tito Mboweni while responding to the DA written questions in the National Assembly.

According to Minister Mboweni, Gauteng Provincial Government is the worst in the country in terms of not paying suppliers in 30 days for the 2018/19 financial year.

In 2018/19 financial year the Gauteng Provincial Government owed over R2,5 billion to suppliers for invoices older than 30 days and not paid by the end of March 2019.

In the first quarter of 2019/20 financial year the Gauteng Provincial Government owed over R1,5 billion to suppliers for invoices older than 30 days and not paid for the period of April 2019 to June 2019.

The Gauteng Department of Health is the worst offender in the province as it owed R2,5 billion in the 2018/2019 financial year and over R1,3 billion in the first quarter of the 2019/20 financial year.

It is unacceptable for the Gauteng Department of Health not to pay its suppliers within 30 days.

In terms of the Public Finance Management Act (PFMA), government departments are obliged to pay suppliers within 30 days of receipt of invoice – but adherence to this, particularly by the Gauteng Provincial Government, has been lacking for years.

The Gauteng Department of Health has years of unpaid accruals for suppliers not being paid yet nothing is done to ensure that they adhere to a 30 day payment system.

Failure to pay suppliers within 30 days is killing small businesses particularly in the townships as they are struggling to survive due to non-payment by government departments.

I will be tabling questions to the MEC for Health, Bandile Masuku to ascertain what measures the department is putting in place to ensure that they adhere to a 30 days payment system.

Where the DA governs in the Western Cape, we pay 99% of suppliers within 30 days. In both the 2017/18 and 2018/19 financial years, the Western Cape Government departments paid on average 99.4% of all invoices for goods and services within 30 days.

ANC Gauteng Government has no appetite for accountability

The ANC-run Gauteng Government has no appetite to stamp out corruption and stem financial mismanagement, nor does it have stomach to prosecute individuals found guilty of mismanaging public funds.

According to the Public Service Commission (PSC) of the 87 cases reported to it in the 2016/17 financial year, 78 individuals were found guilty of financial mismanagement yet no criminal action for violation of the Public Finance Management Act (PFMA) was take in 89% of cases.

Similarly, only 5% of guilty individuals were dismissed from their positions – the lowest rate in four years.

The PSC also noted that departments are negligent in recovering monies that have gone missing. The total amount of money involved in cases relating to financial misconduct in 2016/17 amounted to R198 312 821.71, yet the total amount recovered only came in at R282 428.80.

Gross negligence, 17 cases and theft, 52 cases account for the most types of cases reported.

High on the PSC’s radar are the Departments of Economic Development and Sports, Arts, Recreation and Culture who completely failed to submit any finalised cases to the body in contravention of Section 85 of the PFMA.

The lack of willpower by departments to prosecute and recover stolen money is a disservice to the people of Gauteng who will now go without much needed services as a result.

Gauteng Premier David Makhura announced that he has established an ethics and corruption committee to tackle the challenges faced by his administration, but until there is political will to act, this committee will be another toothless grouping of individuals with more bark than bite.

MEC Creecy Must Come Clean About GP Money Laundering Scheme

Gauteng Finance MEC, Barbara Creecy must come clean about the provincial government’s money laundering scheme which involves tranches of taxpayers money being transferred to registered NGO’s – only for these funds to be siphoned off to non-accredited NGO’s.

This practice, brought to the attention of the DA by the A Re Ageng NGO, has seen the provincial government shift millions of rands through “conduit” NGO’s to organisations that are not accredited – and who may not be performing the work which they claim to be doing.

This exercise was used by the provincial government to transfer funds to NGO’s during the Esidimeni tragedy which claimed the lives of more than 100 mentally ill patients.

This practice is a violation of the Public Finance Management Act (PFMA), and needs to be investigated as a matter of priority so as to safeguard the public purse from abuse and theft.

Recently, one such “conduit payment” to the tune of R5 million was intercepted by fraudsters who used the money to make off with 40 000 litres of diesel. This R5 million was part of a R42 million tranche to be transferred via this “conduit” scheme.

The Gauteng ANC-led provincial government is often heard preaching about transparent and open governance, but time and time again, they prove themselves to be nothing more than hypocrites.

Vulnerable residents of Gauteng are placed at risk by non-accredited and non-compliant NGO’s who do not have the skills nor the capacity to provide them with the assistance they require. This is exacerbated when these NGO’s are aided and abetted by the provincial government’s underhanded tactics.

The DA will write to Finance MEC Creecy demanding that National Treasury be allowed to scrutinise the provincial governments’ practices and rule on what steps must be taken to safeguard Gauteng’s finances.

 

 

Media Enquiries

Adriana Randall MPL
DA Gauteng Shadow MEC for Finance
060 556 4342
 
Warren Gwilt
DA Economic Cluster Manager
073 601 6144

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G-Fleet Must Immediately Suspend Accounts With Bad Debtors

G-Fleet Management

G-Fleet management, which is owed more than R370 million by client departments – namely the Gauteng Departments of Health and Infrastructure as well as the Office of the Chief Justice, must immediately suspend accounts with debt older than 90 days so as to stem the incursion of more bad debt.

The agency has indicated that it has embarked on a process to recover outstanding funds older than 90 days, claiming that it will discontinue the provision of petrol cards to these debtors should the funds not be paid. However this is not enough.

In accordance with the Public Finance Management Act, all transactions must be paid within 30 days of procurement. The fact that some departments and entities have been allowed to ring up debt beyond this period is not only indicative of poor financial controls – it is also unlawful.

Monitor the Performance of G-Fleet

G-Fleet has for many years been flagged by the Auditor General as one of the province’s worst performing entities as it continues to haemorrhage funds. It has fared slightly better under the current CEO – but more needs to be done if the entity is to become financially sound.

Gauteng Roads and Transport MEC, Ismail Vadi must instruct G-Fleet to immediately suspend services to long outstanding debtors and put in place mechanisms to recover outstanding monies.

The DA will continue to monitor the performance of G-Fleet to ensure that it complies with legislation and implements an effective credit control strategy.

 

 

 

Media enquiries:

Fred Nel MPL

DA Gauteng Shadow MEC for Roads and Transport

083 263 2427

 

 

Warren Gwilt

Economic Cluster Manager

073 601 6144

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Gauteng Education Department Cooks School Nutrition Tenders

Open Tender System

The Gauteng Department of Education has once again bungled the so-called “open tender system”, this time by awarding tenders for the school nutrition programme without following due process.

The department is now being served with a court interdict as one of the service providers has challenged the awarding of the tenders, as well as the fact that the tender was only put out to bid for 15 days.

This is in contravention of the Public Finance Management Act.

According to a reply to a DA question on the matter, Gauteng Education MEC, Panyaza Lesufi, misled the Legislature in stating that he was unaware of any allegations of corruption in awarding the school nutrition tenders.

Click here to view the reply.

Abuse Public Funds

This is an indictment on the department as it is not the first time it is being grilled for bungling the tender processes.

MEC Lesufi must take full responsibility for his department not awarding tenders in line with legislation.

The DA insists that MEC Lesufi investigate the alleged irregular awarding of these tenders and take action against officials who wilfully abuse public funds.

Tenders must be open and transparent.

The DA wants to ensure that learners are provided with quality and balanced nutrition.

 

 

Media enquiries:

Khume Ramulifho MPL

DA Gauteng Education Shadow MEC

082 398 7375

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DA Lays Charges On Auditor-General Bribe Attempt

I have today laid charges against three officials in the Gauteng Department of Sports, Arts, Culture and Recreation (SACR) who allegedly attempted to bribe the Auditor-General’s office to remove audit findings on irregular expenditure.

The charges are based on two affidavits that were disclosed by former SACR MEC Molebatsi Bopape – who has been suspended by the ANC as a member of the Gauteng Legislature because she attempted to make a statement at a sitting on 30 September 2016 on corruption in the department.

Documents released by Bopape include affidavits by two senior employees of the Auditor-General of South Africa (AGSA), Mothophatleheng Phillip Rakgwale and Tshireletso Molate.

In his affidavit, Mr Rakgwale relates that Ms Morwesi More, an official of the SACR, came to the AGSA offices on 20 July 2015 together with the Head of Department Ms Namhla Siqaza to discuss findings relating to construction contracts.

Ms More then contacted him five times in connection with a proposal, and Ms Siqaza tried to persuade him on 28 July 2015 to meet with More, which he declined. Ms Siqasa then came to his office on 30 July 2015 to try and persuade him to change the audit outcome.

According to Rakgwale: “She asked me what could be done to remove the findings on the audit report and suggested political intervention to resolve the findings contained on the signed audit and management report issued on the 31 July 2015.”

In his affidavit, Mr Molate relates instances when he was approached by Ms Lorraigne Nuku, an official of SACR, who indicated that she was acting on the instruction of the Head of Department Ms Namhla Siqasa to determine what the HOD could offer to the Senior Manager in charge of the audit, Mr Phillip Rakgwale, to convince him to remove the audit findings regarding irregular expenditure from the audit report.

This includes the HOD telling him that she offered Mr Rakgwale anything he wanted including political intervention, which he declined.

The charge I laid today at the Commercial Crimes unit in Johannesburg requests investigation into the alleged contravention of Section 51 of the Public Audit Act which makes it an offence for any person to hinder or interfere with the Auditor-General or provide false or misleading information.

Furthermore, whether Ms Siqasa as Accounting Officer has contravened Sections 40 and 50 of the Public Finance Management Act (PFMA), which relate to her reporting responsibilities and fiduciary duties. A further charge is whether Siqaza, More and Nuku contravened Section 4 of the Prevention and Combating of Corrupt Activities Act which deals with corrupt activities in relation to public officers.

Premier David Makhura claims that he runs a clean administration, but the ANC is persecuting Bopape despite her efforts to expose corruption in the SACR.

While Siqasa and More have been suspended and are facing disciplinary action, this has not been speedily concluded and does not include criminal charges.

There is an unfortunate history in the provincial government where corrupt officials get away without facing criminal charges.

The DA will monitor the progress of police investigations to ensure that there is real accountability in this matter which has been so bravely raised by Bopape.

 

 

Media Queries:

Jack Bloom MPL

DA Gauteng Shadow MEC for Health

082 333 4222

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Gauteng Finance MEC Must Table Provincial Financial Statements By Month-End

Consolidated Provincial Financial Statements

Gauteng Finance MEC Barbara Creecy has until October 31 to make the province’s consolidated provincial financial statements available for public scrutiny – which the DA firmly believes belies the true state of the province’s financial performance.

The Public Finance Management Act makes it clear that this report must be tabled in the Legislature, something which has not happened since March 2014.

Under the watch of Premier David Makhura and Finance MEC Barbara Creecy, the Gauteng Provincial Government (GPG) has been lauded in some quarters as affecting “game-changing” strategies to enhance government services.

GPG’s Finances

However, after going to great lengths to retrieve the consolidated financial statements for the 2014/15 financial year – which was not tabled by end October 2015, the DA can reveal that the GPG’s finances are all but sound and received a qualified audit opinion from the Auditor General.

The AG found that that the GPG racked up billions in accruals, legal liabilities, and fruitless and wasteful expenditure.

Click here to view the report.

According to the report, R2.22 billion worth of accruals have been outstanding for longer than 30 days.

This has a massive impact on service delivery and deals a heavy blow to the budget process, as delayed payments are rolled over to the next financial year.

Delayed payments also take their toll on service providers who cannot get by without secure cash flow.

Township Economy

With Premier Makhura announcing that the GPG would support the Township Economy by procuring goods and services from the informal sector, the GPG’s current payment record will be the deathblow for many small to medium service providers.

Fruitless and wasteful expenditure amounted to R416 million in 2014/15, up 66% from the previous year’s R166 million. These funds could have been used on underfunded programmes, such as student bursaries, drought relief and support to NPOs.

The DA looks forward to MEC Creecy tabling the report within the next 11 days so as to provide a true reflection of the real state of Gauteng’s financial affairs.

 

Media Enquiries:

Adriana Randall MPL

DA Gauteng Shadow MEC for Finance

060 556 4342

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Gauteng Infrastructure’s Late Payments Impact Projects And Lives

Gauteng Department of Infrastructure Development

The inability of the Gauteng Department of Infrastructure Development (GDID) to pay contractors within 30 days as required by the Public Finance Management Act (PFMA) has dealt a major blow to contractors and service delivery across the province.

DID’s Portfolio Committee evaluated the impact of late payment in response to concerns raised by the Auditor General as well as complaints from contractors who run small businesses. Contractors indicated that the late payments impacted on their businesses to the extent that some of them have been forced to abandon the projects because of cash flow problems.

This also sets projects back and residents of Gauteng are prejudiced by delayed services.

Corruption

The affected contractors also indicated that it was not only late payments that put their businesses at risk, but also the fact that DID officials poor project management capability stretched out projects further than cash flow allowed. In addition, some contractors indicated that in a few cases, bribes were sought by officials in order to pay invoices within the required 30 days.

Newly appointed MEC for DID, Jacob Mamabolo, apologised to the contractors for late payments and undertook to investigate and resolve the problems as soon as possible.

The MEC also indicated that DID was creating an anti-corruption unit within the department to deal with the allegation of bribes.

Livelihoods at Risk by Government

While contractors appreciated the sentiment expressed by the MEC, they remain concerned that their livelihoods are being put at risk by government. The main contributing factor for this situation is the fact that officials in the employ of government either do not have the correct skills or the correct attitude in order to ensure efficient management.

One unfortunately cannot eat ‘apologies’. The DA will continue to hold DID to account in order to ensure that they pay contractors on time.

 

Media enquiries:

Alan Fuchs MPL

DA Gauteng Shadow MEC for Infrastructure Development

060 558 8313

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