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More moves to hobble Treasury

Oct 08 2017 05:47
Sipho Masondo

Johannesburg - Sweeping changes are afoot in a critical department of Treasury that could see government departments decide for themselves whether or not to adhere to strict tender laws.

City Press understands that the proposed changes to the office of the chief procurement officer (CPO) are being mooted without consultation with Treasury director-general (DG) Dondo Mogajane.

This is the latest move that supports claims by senior Treasury officials, reported by City Press last week, that Finance Minister Malusi Gigaba and his deputy Sfiso Buthelezi are establishing a parallel administration in the critical government department.

City Press further reported that Gigaba and Buthelezi bypassed Mogajane and did not consult senior Treasury officials when making critical decisions, including last week’s decision to hand national carrier SAA a R3.2bn bailout.

Treasury spokesperson Mayihlome Tshwete denied the allegations, and said the ministry’s staff report to Gigaba and civil servants to Mogajane.

However, according to minutes of meetings chaired almost two weeks ago by acting CPO Willie Mathebula, and according to senior staff in his office, he met Gigaba and Buthelezi to discuss restructuring his office.

Mathebula was appointed last month.

The minutes reveal that Mathebula had neither informed Mogajane, nor obtained his permission, to proceed with the proposed restructuring of his office.

“The acting CPO reported on the following outcomes that arose from the meetings with the minister and the deputy minister. There has been no meeting with the director-general yet,” the minutes read.

A senior government executive close to Treasury said it was unheard of to restructure an office without first informing and obtaining permission from the director-general.

“I know that some government departments now liaise directly with the office of the minister, instead of the director-general. I have seen letters from the standing committee on public accounts addressed directly to the minister.

"Of course, they also copy Mogajane, but administrative issues should be directed straight to the director-general,” he said.

A senior government executive said the CPO is a deputy director-general position and reports to Mogajane.

“Anything you take to the minister, you must have taken to the director-general.

“Mathebula has been in office for a month and he hasn’t had a meeting with the director-general. What an indictment,” he said.

The minutes indicate that a meeting will be arranged to bring Mogajane up to speed with the changes and for him to guide the “expected direction”.

But by then, the process would already have begun.

Tshwete did not respond to detailed questions, but said: “This clearly appears to be office politics. The DG encourages colleagues to meet with human resources to discuss any issues they may have.

“This director-general is in communication with his CPO and will not discuss internal office matters on media platforms. The DG would like to encourage colleagues to come to his office if there are issues they want to address.”

THE PROPOSED CHANGES

At the meeting Mathebula chaired, it was discussed what he had deliberated with Gigaba and Buthelezi, including:

- A “relook” at the powers of his office’s governance monitoring and compliance (GMC) unit to approve or decline requests from government departments to deviate from tender laws and to extend tenders;

- That the office of the CPO operated “like a dictator, and not an enabler”;

- That procurement was not aligned to transformation and that the office did not support state-owned companies;

- That the office didn’t consult other government departments and companies and ignored their procurement officials;

- That contracts, like that signed with Vodacom and challenged by the Competition Commission this week, were a barrier to economic development and should be reviewed and decentralised;

- That some clauses of the Preferential Procurement Policy Framework Act, whose focus is black empowerment, were not implementable and posed a barrier to doing business; and

- That government’s policy to pay service providers within 30 days needed to be reviewed to stop companies from closing down due to non-payment.

This function is currently housed in the presidency’s department of monitoring and evaluation. Mathebula and his political heads want the function moved to Treasury.

TO DEVIATE OR NOT TO DEVIATE

The minutes reveal a proposal to appoint an independent company to assess the CPO office’s work.

An official with knowledge of the meeting said the decision was made after officials resisted withdrawing the governance monitoring and compliance unit’s powers to decide if departments’ requests for tender deviations and extensions were justified.

The official said the reason the unit was first established was because former CPO Kenneth Brown “picked up that a lot of tenders were not advertised; they were awarded through deviations”.

“They were not cost effective and cost government a lot of money.

“In the past, government departments were not required to seek permission to deviate. They were only required to inform Treasury and the office of the Auditor-General after they had deviated.

"Requiring departments to seek permission to deviate has saved government billions because many requests have been declined,” he said.

The official said Mathebula argued that departments should be left to decide for themselves.

However, the meeting resolved to seek legal opinion about whether the unit should keep its powers.

It was noted in the minutes that the GMC’s mandate would be re-examined and the matter would be discussed with accounting officers.

“Further discussions to follow on whether to put together a committee for collective approvals rather than only the GMC making decisions.”

The official said government wanted to curtail the GMC’s powers to allow departments and entities such as water and sanitation, transport, and Eskom to implement expensive projects and the nuclear deal without having to obtain Treasury’s permission.

“Under the current environment, they can’t do those projects without deviating from tender processes.”

In April, City Press reported that Treasury blocked the department of energy from procuring the nuclear build programme directly from international governments without first following tender processes.

Between April and June, Treasury declined 70 requests for deviations. The value of more than half of these contracts is unknown.

The few known tenders amount to more than R2.5bn.

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