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18 January 2012 | Angeline Albert
lack of skilled purchasers in South Africa’s public sector is resulting in an
absence of written contracts and excessive payments made to suppliers.
was view of Terrence Nombembe, auditor-general of South Africa (AGSA), who found procurement
irregularities – such as payments made in excess of agreed prices and
uncompetitive contract extensions – carried out by some of the country’s public
who presented the audit findings for the 2010/2011 financial year to parliament
on Monday, said while most government departments received good reports, more
needed to be done to improve supply chain practices.
management of projects and contracts remains a weakness. In most cases the
reason for these weaknesses was insufficient capacity and skills to manage
contracts. In monitoring the effectiveness of internal controls, keen emphasis
needs to be directed towards service delivery and compliance with laws and
regulation, particularly supply chain management.”
his audit, Nombembe focused on legislative requirements including procurement
and contract management for the financial year ended March 2011 and tested the
purchasing processes of 4,193 contracts totalling R25.6 billion ($3.1 billion).
than a fifth of organisations checked received clean audit results (46
provincial departments and bodies). And only three national departments received
clean reports (8 per cent) – the Department of Public Enterprises, the
Department of Science and Technology and the Department of Environmental
six national government departments and 55 other national bodies the audit
results were worse than the previous financial year.
contracts were extended so much that competitive bidding processes were
circumvented. A competitive bidding process must be followed for purchases
above R500,000 ($62,446) but such bids were not invited at 28 public bodies for
goods and services totalling R516 million ($64.4 million). In some cases, bids
were not advertised through the public media and the required number of price
quotations for contracts were not always obtained.
AGSA has offered to hold quarterly update meetings with public sector leaders
to help them ensure transparent, competitive and cost-effective supply chain