- The social development department in KZN irregularly spent a total of nearly R30 million on PPE and blankets.
- Only 4 982 blankets out of 48 000 were distributed as at 8 May.
- Premier Sihle Zikalala said senior officials were implicated in the investigation.
KwaZulu-Natal Premier Sihle Zikalala revealed there had been irregular expenditure amounting to nearly R30 million for personal protective equipment (PPE) and blankets by the province’s social development department.
Speaking to journalists at the eThekwini Disaster Management Centre, Zikalala said there was R13 630 229.50 in irregular expenditure for PPE and an “approximate financial loss to the department as a result of the misrepresentations amount to R15 808 000” for the blankets.
Zikalala promised strict consequence management and said one person was reported to the authorities for investigation.
“In Covid-19, we are dealing with a serious emergency. At a time when we should be focusing all our energies on defeating this invisible enemy, we deeply regret that we have to be sidetracked by such matters,” he said.
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He said the forensic investigation was commissioned by the KZN provincial executive in April, following allegations that the procurement contracts were inflated and were linked to connected individuals.
On the PPE
Zikalala said the investigation highlighted significant irregularities “which were caused by inadequate and ineffective systems of internal controls with the provincial department of social development”.
“These included the purchase orders for PPE issued to 11 service providers prior to approval of the procurement submission by the accounting officers; some of the service providers exceeded the minimum amount of purchase as regulated under Treasury instruction notes.”
He said that, in some instances, quotations were changed three times, and on each occasion the quantities of the items were reduced in order to reduce the total cost of procurement.
“However, most noticeably there was no reduction of the pricing per unit. As a result of the above, the investigation concluded that all payments made to the service providers are irregular to the tune of R13 630 229.50. Had the department applied the regulated prices and processes correctly, it would have saved R2 231 996.21,” he said.
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Zikalala said the investigation noted that some service providers were paid in full on 4 May, while the delivery of goods only happened on 11 May.
“It is an anomaly to pay for services not rendered but effect payment in advance. The investigation also noted that some service providers invoiced the department for goods not yet delivered.”
He said investigators recommended that disciplinary action be taken against the chief financial officer, acting supply chain manager, cluster chief directors and supply chain officials.
“The investigation found that there was abuse of Covid-19 emergency procurement provisions and efforts to cover up, which included attempts to backdate submissions for awards to service providers,” said Zikalala.
What about the blankets?
Zikalala said there was no proof that a needs analysis was done before the decision to procure blankets was taken.
He said investigations established that the supplier misrepresented the specifications of the blankets.
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“Most blankets supplied were not in accordance with the specifications of 220 x 24cm in size. The approximate financial loss to the department as a result of the misrepresentations amount to R15 808 000.”
He said distribution was also shockingly ignored, with investigators noting that 4 982 blankets out of a whopping 48 000 were distributed as at 8 May.
“From this observation, the investigators discovered that over 43 018 blankets were left in storage centres with uncontrolled access; and some have been damaged and unaccounted for, amounting to possible fruitless and wasteful expenditure.”
He said there was no evidence the department considered the difference in pricing to determine the reasonable value.
Zikalala added there was no negotiating of discount rates with the service providers.
When asked if Social Development MEC Nonhlanhla Khoza, who was absent at the briefing, would bare any brunt of the blame, Zikalala said: “There is nothing that indicates wrongdoing on the side of the MEC. If the report indicated that, we would have presented it here.”
