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Cape Town - Parliament's standing committee on public accounts (Scopa) slammed the department of justice on Wednesday for "totally unacceptable" levels of non-compliance to tender processes.
Scopa said the department had a "worryingly" ineffective system of supply chain management, which allows officials to completely disregard policy and regulation.
During a hearing on its 2008/09 annual report, officials admitted the department was only 50% compliant when it came to tenders, financial management and related human resources policy, procedures and regulations. Its effectiveness in terms of supply chain management is only "15%".
Exacerbating the problem is a tendency to write off irregular expenditure incurred when officials award tenders without following proper procedure. This happens, the department explained, mainly in cases where it felt it got "value for money", regardless of tender laws not being followed.
Most of the department's R69m in irregular expenditure documented for the financial year has been declared non-recoverable. Part of this, for example, is a R13m contract awarded to a consultant without tender procedures being followed.
The official who awarded the contract was dismissed. But the expenditure was condoned and declared "not recoverable" because the department deemed that "value for money was received".
The audit report also flagged how management had been unsuccessful in its attempt to improve internal controls. "We have taken our eye off the ball in some areas," admitted the department's new director general Nonkululeko Msomi.
Committee chair Themba Godi said the non-compliance issue went to the heart of how government's tender system was easily manipulated.
"This is not a pretty picture," Godi said. "The concern here is that as long as there have been deviations from the rules, there should be consequences for officials.
"I could have my cousin's company that is very competent, but award it a contract without going to tender. The greatest worry and risk is that this allows me to corruptly give contracts to somebody I know.
"The disquiet here is the emphasis on value for money (as justification for writing off irregular expenditure). It seems to me that the practice here is to condone and then there will be peace."
Godi continued to press flustered department officials and declared that there was little point in promising to develop improved control systems if officials were just going to ignore them.
DA MP on the committee Mark Steele said: "I am not hearing the language of accountability."
MPs also raised concerns that fraud and theft levels in the department had increased. For example, cheque fraud doubled in the financial year in question to R2.4m. But officials often get away with fraud and corruption by resigning (with full benefits) before they can appear before a disciplinary committee.
- Fin24.com
